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7 best monthly dividend stocks

When reliability and a steady income stream matter most, consider these stocks.

For some investors, dividend investing entails more than buying shares of the highest-paying dividend stocks they can find. Many low-risk investors prefer reliability and a steady stream of income and build a portfolio of carefully selected dividend stocks that meet these criteria.

This list is composed of stocks that deliver the best of both these worlds — high payouts and a monthly distribution schedule that offers income investors reliable, steady income. Consider this list a jumping-off point as you do your due diligence before investing in monthly dividend stocks.

1. Sabine Royalty Trust (NYSE: SBR)

Sabine Royalty Trust holds royalty and mineral interests in oil and gas properties in Florida, Louisiana, Mississippi, New Mexico, Oklahoma and Texas. The trust was established in 1982 between Sabine Corp, a Texas-based oil and natural gas company, and InterFirst Bank in Dallas, Texas. Simmons Bank is the trustee.

On November 5, 2021, Sabine Royalty Trust declared a $0.3752 per share monthly dividend, a 9.84% increase from its prior dividend of $0.3416. This represents a $4.50 annualized dividend and a forward dividend yield of 10.29% as of market close on November 8, 2021. Sabine Royalty Trust has raised its dividend payment by 1.19% over the past three years.

  • Market cap: $627.06 million
  • Recent stock price: $43.01 on 11/22/2021
  • Dividend: $4.50
  • Dividend yield: 7.04%
  • 3-year dividend growth: 1.19%
  • 1-year return: 61.24%
  • 5-year return: 22.48%

2. Invesco High Income Trust II (NYSE: VLT)

Invesco High Income Trust II seeks to provide high income through its diversified holdings of income-producing, fixed-income securities. The trust invests in a range of sectors, including:

  • Aerospace and defense.
  • Agricultural and farm machinery.
  • Apparel retail.
  • Healthcare facilities.
  • Internet software and services.
  • Oil and gas equipment and services.
  • Pharmaceuticals.

Invesco is an investment management company founded in 1978 and headquartered in Atlanta, Georgia.

On November 1, 2021, Invesco High Income Trust II declared a monthly dividend of $0.0964 per share, which represents a $1.16 annualized dividend and a forward dividend yield of 7.90% as of market close on November 8, 2021. Its dividends have grown 12.42% over the past three years.

  • Market cap: $94.458 million
  • Recent stock price: $14.54 on 11/22/2021
  • Dividend: $1.16
  • Dividend yield: 7.90%
  • 3-year dividend growth: 12.42%
  • 1-year return: 15.62%
  • 5-year return: 10.25%

3. Putnam Premier Income Trust (NYSE: PPT)

Putnam Premier Income Trust seeks high current income by investing in a wide range of fixed-income securities, including US government, high-yield and international fixed-income securities. Putnam Investments is an investment management firm founded in 1937 and headquartered in Boston, Massachusetts.

On November 1, 2021, Putnam Premier Income Trust declared a monthly dividend of $0.026 per share. This represents a $0.31 annualized dividend and a forward dividend yield of 7.05% as of market close on November 8, 2021.

  • Market cap: $455.21 million
  • Recent stock price: $4.40 on 11/22/2021
  • Dividend: $0.31
  • Dividend yield: 7.05%
  • 3-year dividend growth: 31.73%
  • 1-year return: -3.25%
  • 5-year return: -6.89%

4. BlackRock Income Trust (NYSE: BKT)

New York City-based BlackRock Income Trust seeks the preservation of capital and high monthly income by investing primarily in mortgage-backed securities.

On November 1, 2021, BlackRock Income Trust declared a monthly dividend of $0.0344 per share, which represents a $0.41 annualized dividend. Its forward dividend yield stands at 6.79% as of market close on November 8, 2021. BlackRock Income Trust’s dividend payout has remained unchanged since August of 2018, when it raised it 29.81% from its previous dividend payout of $0.0265 per share.

  • Market cap: $386.38 million
  • Recent stock price: $5.77 on 11/22/2021
  • Dividend: $0.41
  • Dividend yield: 6.79%
  • 3-year dividend growth: 29.81%
  • 1-year return: -0.49%
  • 5-year return: -2.89%

5. Pembina Pipeline (NYSE: PBA)

Pembina Pipeline is a Canadian energy and midstream service provider that transports hydrocarbon liquids and natural gas through its system of owned pipelines. The company also owns gas-gathering and -processing facilities plus an oil and natural gas liquids infrastructure business. Pembina began paying dividends in 1997 and has paid out more than $10 billion in dividends since its inception.

Pembina Pipeline declared its monthly dividend on November 4, 2021, announcing a $0.21 per share dividend. This represents an annualized dividend of $2.52 and a forward dividend yield of 7.32% as of market close on November 8, 2021. Pembina Pipeline has raised its dividend payout each year consecutively for the past eight years.

  • Market cap: $22.54 billion
  • Recent stock price: $32.24 on 11/22/2021
  • Dividend: $2.52
  • Dividend yield: 7.32%
  • 3-year dividend growth: 18.79%
  • 1-year return: 55.09%
  • 5-year return: 21.10%

6. Gladstone Investment (Nasdaq: GAIN)

Gladstone Investment is a business development company and private equity fund that makes debt and equity investments in established US-based private businesses. Debt investments include senior term loans, senior subordinated loans and junior subordinated loans. Equity investments include preferred or common equity in connection with buyouts or other recapitalizations.

On October 12, 2021, Gladstone Investment declared a $0.075 per share dividend for the months of October, November and December of 2021. This is a 7.14% increase over its previous dividend of $0.07 per share.

The company also announced plans to pay shareholders a supplemental dividend of $0.09 per share in December 2021. This is in addition to the $0.07 per share upcoming dividend.

Gladstone’s recent declaration represents an annualized dividend of $0.90 and a forward dividend yield of 5.44% as of market close on November 8, 2021.

  • Market cap: $560.33 million
  • Recent stock price: $16.88 on 11/22/2021
  • Dividend: $0.90
  • Dividend yield: 5.44%
  • 3-year dividend growth: 12.52%
  • 1-year return: 81.71%
  • 5-year return: 105.9%

7. Realty Income (NYSE: O)

Realty Income is a San Diego, California-based real estate investment trust that seeks to provide investors with dependable monthly income through its investments in commercial real estate properties. Its portfolio comprises over 7,000 commercial properties owned under long-term leases.

Realty Income has paid 615 consecutive monthly dividends since its inception 52 years ago, increasing its dividend 112 times since going public in 1994. Most recently, Realty Income announced a monthly dividend of $0.236 per share, which represents an annualized dividend of $2.83 and a forward dividend yield of 3.946% as of market close on November 8, 2021.

  • Market cap: $40.42 billion
  • Recent stock price: $71.44 on 11/22/2021
  • Dividend: $2.83
  • Dividend yield: 3.946%
  • 3-year dividend growth: 10.41%
  • 1-year return: 16.51%
  • 5-year return: 31.95%

Investing in dividend stocks

If you’re looking to add some income-generating stocks to your portfolio, follow these steps:

  1. Choose a broker. Always shop around and compare brokers, as no two are the same. Look for brokers that charge minimal or zero fees and commissions, and consider the broker’s reputation.
  2. Research dividend-paying stocks. Start with this list of best monthly dividend stocks but also do some deeper due diligence before you invest.
  3. Pick and make your investments. Choose the monthly dividend stocks that meet your investment criteria and decide how many shares you want to purchase. When you’re ready, submit your buy order.

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Bottom line

Though many don’t offer the explosive growth that aggressive investors look for when trading stocks, dividend stocks that pay monthly provide income investors with the peace of mind of a steady income stream.

As you look to build out your portfolio of income-producing stocks, these seven best monthly dividend stocks are a great place to start. But always practice your own due diligence before making any investment decision.

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