There aren't many dividend stocks that make payments on a monthly basis, and that's why those that do are a rare breed. The stocks can be very valuable to investors who are on a fixed income and want to add to their cash flow every month, or who simply don't want to wait three months to receive their next dividend payment.
Either way, these three stocks will satisfy those needs, as each one listed below pays its shareholders a dividend every month.
1. LTC Properties
LTC Properties (NYSE:LTC) is an attractive dividend stock for multiple reasons. The first is that as a real estate investment trust (REIT), it has a consistent, recurring source of income that gives investors a great deal of stability. Without large fluctuations in sales from one period to the next, investors can safely predict how the company will perform. Although LTC has a payout ratio of over 92%, this shouldn't raise alarms for investors as REITs are legally required to pay at least 90% of their profits back to shareholders in the form of dividends.
In each of the past three fiscal years, LTC's revenue was between $161 million and $168 million. Operating income has also been within a very narrow range of $107 million to $113 million. For investors, that's great stability that can make the stock an ideal long-term buy.
Another reason the stock will appeal to investors is that it invests in senior housing and nursing properties. With a portfolio spanning 30 states, LTC has plenty of exposure across the country, ensuring that it isn't too dependent on one state or even one region of the country. And with the population continuing to get older, demand will only pick up in the years ahead for senior housing.
Lastly, one of the best reasons for investing in LTC is for the dividend itself. Currently, shareholders receive cash payments of $0.19 every month, which equates with a dividend yield of 5.1%. That's an above-average dividend yield, well above the average S&P payout of just 1.85%. The last time the company increased its dividend was in 2016.
2. Shaw Communications
Shaw Communications (NYSE:SJR) is one of Canada's top telecom companies, and it not only offers stability but a lot of potential growth as well. The company has mainly been known as a cable and Internet provider, but in 2015 it entered the mobile phone business by acquiring WIND Mobile, which it rebranded as Freedom Mobile. With 1.66 million subscribers, the mobile brand is still far behind bigger Canadian carriers like BCE, which has 9.83 million wireless customers. However, it's an example of the potential that exists as Shaw continues to invest in and develop its Freedom Mobile brand, by improving its network and making it more competitive with BCE and other carriers.
Besides growth, Shaw also offers a great monthly dividend of about $0.075 (payouts will fluctuate since the payments are based in Canadian dollars) which currently yields 4.4% per year. That's still well above the S&P's average dividend yield but a little behind LTC's payouts. The stock last increased its dividend payments in 2015. Investing in the Canadian stock can add critical diversification for investors who want to balance their exposure to U.S. stocks.
3. Gladstone Land
Gladstone Land (NASDAQ:LAND) is the second REIT on this list, but it's much different from LTC. The company is in the agriculture business and its portfolio is full of farms. Gladstone has more than 100 farms which are located in 10 states. The company plans to continue growing and says it is "actively seeking" to purchase additional properties.
Investing in agriculture can be another good way for investors to diversify their portfolios without taking on much risk. As the U.S. population keeps growing and consumers look to more health-conscious foods, demand for fruits and vegetables will rise, in lockstep with the need for more farmland.
In its letter to shareholders, Gladstone indicated that its farmland is in demand, stating that "Most of the regions where our farms are located continue to experience steady appreciation in the underlying land values, and the rental rates charged on these farms are generally stable or increasing slightly."
Gladstone offers another strong above-average dividend yield, even though at 4.2%, it's the lowest payout on this list. But as an added bonus, the stock has increased its dividend payments over the years, rising from $0.0425 at the end of 2016 to $0.0446 today, for an increase of 4.9% during that time. Annually, that averages out to a modest increase of about 1.6% per year.
Which stock is best for investors today?
For risk-averse investors, LTC looks like the safest investment of the three stocks listed here. Farming can be volatile and weather-dependent, making Gladstone a riskier buy, while healthcare should offer a lot more stability for LTC shareholders. Shaw, meanwhile, is more appropriate for growth-oriented investors who want more potential for price growth from their dividend stock.