If you’re retired and looking for your investment portfolio to provide an income stream, the biggest thing you’re looking for is consistency. And that’s what you’ll get from quality monthly dividend stocks.
Why Monthly Dividend Stocks are Important for Retirees
Unlike a dividend stock that pays out quarterly, annually or irregularly, monthly dividend stocks provide retirees with a consistent cash flow to help cover their living expenses. The downside of smaller payouts is more than set off by the convenience of a monthly amount that can help them with budgeting and financial planning.
And if you’re still looking to reinvest your dividend payouts rather than spend them, monthly dividend stocks have that advantage as well. Because when you get checks more often from the company as a payout, you can reinvest it in the stock of your choosing rather than waiting for a quarterly check.
Today, let’s evaluate stocks to choose the best monthly dividend stocks you can buy in February 2024. We evaluate these stocks based on their growth, earnings performance, momentum, analyst sentiment, and dividend history.
PennantPark Floating Rate Capital (PFLT)
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PennantPark Floating Rate Capital (NYSE:PFLT) is a business development company or BDC. As such, it has a structure returning 90% of taxable income back to shareholders, making it an ideal choice for monthly dividend stocks.
PennantPark invests in middle-market private companies through first-lien debt that’s secured through collateral, minimizing risk to PennantPark and its investors should the debtor fall behind in payments.
Its current portfolio includes $1.27 million in assets, with $1.09 million of first lien secured debt. In the fourth quarter of 2023, it invested $302.6 million into 13 new and 34 existing portfolio companies with an average interest rate of 11.9%.
That kind of return should keep the income rolling in for investors. PennantPark stock provides a dividend yield of 11% and receives “B” ratings in both the Portfolio Grader and the Dividend Grader.
Main Street Capital (MAIN)
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Based in Houston, Main Street Capital (NYSE:MAIN) is an equity firm that invests in lower and middle-market private companies. It’s put money into more than 200 companies in its history that are looking for financial help or money to grow their businesses.
Its most recent investment is with an unnamed dental service organization in the Midwest. Main Street says it and a co-investor partnered on a deal with Main Street funding $12.8 million in first lien, senior secured term debt and a direct equity investment.
Main Street pays a monthly dividend of 24 cents per share, which at current prices would be a dividend yield of 6.4%. But it also has occasional supplemental dividend payouts, like the one declared on Feb. 20 at 30 cents per share.
MAIN stock is up 11% in the last 12 months and receives “B” ratings in both the Portfolio Grader and the Dividend Grader.
Gladstone Investment Corp. (GAIN)
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Gladstone Investment Corp. (NASDAQ:GAIN) is another business development company based in Virginia, focused on investing in mature lower middle-market companies. GAIN provides investors with significant monthly dividends from its diverse portfolio of investments.
Gladstone and Apple – Opportunities and Challenges in Today’s Market
Gladstone Capital Corp. (GLAD)
There’s no mistaking it, the investment world is undergoing seismic shifts. The rise and fall of markets are inducing a sense of urgency in companies such as Gladstone Capital Corp. (GLAD). While the hand of time continues its unstoppable march forward, GLAD persistently maneuvers its investments to adapt to the ebbs and flows of market forces. Leading the charge, GLAD remains stalwart amidst the ever-shifting tides, seeking to buoyant the companies under its capable wing. While the third fiscal quarter of 2023 concluded on a 13% high from the previous year, the landscape remains unpredictable. As the tides turn, GLAD’s dividends offer a beacon of hope and stability in the tempestuous financial seas. With a dividend yield of 9.7%, many hopeful eyes are turned to the company. The risk and uncertainty that sit perched like vultures just beyond the horizon allows for an 8.25 cents per share monthly dividend for common shareholders, and 13 cents per month for preferred shareholders, providing a comforting lighthouse amidst the turmoil.
Apple Hospitality REIT (APLE)
Apple Hospitality REIT (APLE) navigates the investment landscape from its steadfast perch in Virginia. With its niche in upscale hotel properties, APLE has carved out its own unique corner of the market. The company’s portfolio boasts 225 hotels and 29,900 guest rooms nestled across 38 states, including a recent acquisition in the form of a Marriott-branded property at the Las Vegas Convention Center. Revenue for the third fiscal quarter of 2023 plateaued at $58.5 million, showing a modest retraction. Nevertheless, APLE’s monthly dividend stock, beautified with a 6% yield, sets a warm and inviting table for investors. Despite a “C” rating in the Portfolio Grader, APLE garners an “A” rating in the Dividend Grader, beckoning investors to partake in a feast of potential nestled within the confines of its stock.
U.S. Global Investors (GROW)
Amidst the complex matrix of investment firms, U.S. Global Investors (GROW) stands as a bastion of active equity and bond product management. This steadfast company offers an array of eight no-load mutual funds, catering to emerging markets, precious metals, bonds, and domestic funds. U.S. Global also extends its services through two exchange-traded funds: U.S. Global Jets ETF (JETS) and U.S. Global Go Gold and Precious Metal Miners ETF (GOAU). While fourth-quarter revenue saw a decline from $3.72 million to $2.81 million, U.S. Global’s profits prevailed, soaring from 6 cents per share to 9 cents per share. The company’s unwavering commitment to adapt and thrive in the face of adversity is emblematic of its unrelenting spirit in the investment arena.
Exploring High Yield Dividend Stocks for Potential Investors
When it comes to investing in stocks, one of the most attractive assets for potential investors is high dividend yield. In today’s market, two notable companies, both Business Development Companies (BDCs), stand out as solid options for those seeking high dividend stocks.
PennantPark Floating Rate Capital (PFLT)
PennantPark Floating Rate Capital (NASDAQ:PFLT) is one such BDC that has garnered attention. Despite an uncertain market, PFLT manages to provide an income security with a monthly dividend payout, even in the face of stock market volatility.
PFLT has showcased resilience by maintaining a 3.5% monthly dividend yield. This consistency has not gone unnoticed, earning it a “C” rating in the Portfolio Grader and a “B” rating in the Dividend Grader. These ratings, placed in the context of the current market, emphasize the value of the monthly income PFLT provides, regardless of market performance.
PennantPark Investment Corp. (PNNT)
Another noteworthy BDC is PennantPark Investment Corp. (NYSE:PNNT), managed by PennantPark Investment Advisors. This company focuses on investing in U.S. middle-market companies through various debt and equity investments. Despite market fluctuations, PNNT remains a key player with a diverse investment portfolio reaching $1.21 million.
In the fourth quarter, PNNT showed remarkable growth with net accesses totaling $499.1 million. The company reported a quarterly income of $15.7 million, equivalent to 24 cents per share. Notably, PNNT distributed a total of 21 cents per share in the same period.
PNNT stands out with a remarkable 12.6% dividend yield and has witnessed a 30% surge in stock value over the past year. Such growth has translated to a “B” rating in the Portfolio Grader and an “A” rating in the Dividend Grader, solidifying its position as a top contender for investors seeking high yield dividend stocks despite market volatility.
