Dividend payments typically reach shareholders quarterly or annually in the stock market. However, some companies, particularly Real Estate Investment Trusts (REITs), distribute dividends monthly. Their predictable monthly rent payments make it easy to follow this pattern. Yet, most stocks don’t operate this way, hence the more common quarterly or annual payouts. These are also some of the best monthly dividend stocks.
Passive income streams are crucial for wealth growth and leveraging compound interest. While many so-called passive income methods require substantial work, dividend payments stand out as genuinely passive. The only requirement? Owning company shares.
Of course, it’s wise to research before buying shares. Ensure the companies are reputable with strong growth potential. When it comes to monthly dividend stocks, the selection pool is smaller than quarterly or annual payers. This smaller pool simplifies the process of choosing where to invest.
Slate Grocery REIT (SRRTF)
Slate Grocery REIT (OTC:SRRTF) more commonly trades under the ticker (OTC:SGR-UN.TO) on the Toronto Stock Exchange. The company is a REIT that owns and operates various U.S. chain grocery stores such as Kroger (NYSE:KR), Tom Thumb, and Safeway (NYSE:SWY). On an annual basis, the company distributes $0.86 per share, so each month, they give shareholders approximately $0.7 per share in dividend payments.
Slate Grocery has seen revenue growth of 30% year-over-year, which was reported in their first quarter earnings results. They have also seen increased occupancy rates from new leasing. This company is a fairly stable one. Its stock price hasn’t fluctuated much since its inception in 2014, the only exception in the market crash in early 2020, which sent most stocks tumbling.
Another reason to consider adding this REIT to your portfolio is this. REITs operate as a good diversifier along with stocks and even gold to balance out a portfolio. Also, as a stock in the consumer staples sector, it’s expected that the company’s earnings will continue chugging along even in a market downturn. This makes it one of those best monthly dividend stocks to buy.
Sabine Royalty Trust (SBR)
Sabine Royalty Trust (NYSE:SBR) is located in Dallas, Texas; this company has a royalty stake in oil and gas properties located throughout the southeastern U.S. Royalty companies such as Sabine Royalty Tryst own the land of said properties and farm out the operational cost to other companies for a portion of the revenue.
Sabine Royalty Trust reported a 14% increase in revenue year-over-year in its most recent earnings release. Oil could continue to be in demand despite the world’s transition to electric vehicles due to their prohibitively high costs. Also, the company is exploring ESG initiatives to ensure their production reduces its carbon footprint, thus also making it one of those eco-friendly monthly dividend stocks.
With the volatility in the oil and natural gas market, the company’s monthly dividend payments have decreased to $0.33 per share in the month of June. When the oil and gas prices were soaring back in 2022, the company was sending out dividend payments of around $1 per share per month. Sabine Royalty Trust is a stock to watch when the oil and gas markets grow.
Ellington Financial (EFC)
Ellington Financial (NYSE:EFC), headquartered in Connecticut, manages mortgage-backed securities and other financial-related assets. In early June, they announced a monthly dividend payment of $0.15 per share.
On July 3, the company said in a press release that they entered a merger agreement by which they would acquire Great Ajax (NYSE:AJX), another mortgage-related REIT. The transaction is anticipated to close by the end of 2023. Ellington Financial reported a net income of $45 million in the first quarter of 2023 compared to Q1 2022, which saw a net loss of $6 million. They also announced they would acquire Arlington Asset Investment (NYSE:AAIC), a REIT, in late May.
With the recent acquisitions and net income growth on top of a roughly 13% annual dividend yield that pays out every month, Ellington Financial is a company to keep in mind when looking for a passive income-producing REIT.
On the date of publication, Noah Bolton did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
