What are the best monthly dividend stocks with 5% yield? If you are interested in it, follow us now, as Insider Monkey has recently published an interesting and useful article about this topic. As a matter of fact there are only 30 companies that pay monthly dividends, as companies pay quaterly dividends as a rule.
Generally those companies that pay monthly dividends are real estate investment trusts, which conduct their operations (collect rent, mortgage payments, etc.) on a month-by-month basis. Investing in stocks that pay monthly dividends is a simple way to generate cash flow for people who rely on their portfolios for income, such as retirees. In addition, more frequent dividend payouts allows investors to compound their returns more frequently, which results in better returns over the long-run. However, monthly dividend stocks also carry some risks that should not be overlooked.
Now without a further ado let’s see what Insider Monkey has investigated for us. We have picked two stocks from their list.
The first stock is Apple Hospitality REIT Inc (NYSE:APLE). There were nine funds holding shares of Apple Hospitality REIT Inc (NYSE:APLE) on March 31, with a total value of $38.02 million, compared to 12 funds with stakes worth $50 million a quarter earlier. Apple Hospitality REIT Inc (NYSE:APLE) invests in lodging properties in the U.S and currently has over 230 hotels across 33 states. It pays a monthly dividend of $0.10 per share, which gives the stock a yield of 6.6%. However, it should be mentioned that Apple Hospitality REIT Inc (NYSE:APLE)’s payout ratio is at 170%, which means that the company is paying out in dividends much more than it earns. It suggests that the company could be forced to reduce its dividend, although its payments have been consistent over the last couple of years. The second stock is Prospect Capital Corporation (NASDAQ:PSEC). In Prospect Capital Corporation (NASDAQ:PSEC), 11 investors in our database held long positions worth $26.11 million heading into the second quarter, up from nine funds and $18.85 million, respectively, a quarter earlier. Its stock has a high yield of 12%, based on the $0.08 dividend that Prospect Capital Corporation (NASDAQ:PSEC) pays out every month. Prospect Capital Corporation (NASDAQ:PSEC) is a financial services company that is engaged in investing and lending to middle-market, privately-held companies. For its fiscal third quarter, it reported net investment income of $0.20 per share and distributions of $0.25, which results in a payout ratio of over 120%.
For any further interesting information read Insider Monkey’s article about 10 monthly dividend stocks with 5% yield.
