The 10 Highest Yielding Monthly Dividend Payers

The vast majority of dividend paying companies make payments to shareholders once per quarter. This can cause cash flow issues for investors who need monthly income.

This article examines the 10 highest yielding monthly dividend payers for investors looking for both monthly income and high income from their investments.

It is important to note that high yielding monthly dividend payers are, on average, far riskier than the overall market.There is elevated risk of a dividend cut with high payout ratios – which are very often associated with high yields.

High Yield Monthly Dividend Stock #10: Whitestone (WSR)

Dividend Yield: 9.4%

Whitestone REIT acquires, owns and develops commercial properties in densely populated areas.Most of its shopping center REIT brethren have large spaces with traditional tenants.

As a REIT, Whitestone is legally required to pay out 90% of their profits as distributions.This means REITs (on average) have high yields.You can see all the publicly traded REITs in the spreadsheet below.

Click here to download your Complete REIT Excel Spreadsheet List now. Keep reading this article to learn more.

Whitestone often rents to nontraditional tenants and its properties are on the small side in terms of square feet.

The REIT focuses on the areas around Phoenix, Chicago, Dallas, San Antonio and Houston.These are five of the top fifteen fasting growing populations in the United States.

wsr region

Source: Whitestone Investor Presentation 2018, page 8

The median household income within three miles of a Whitestone property is $81,910, almost 10% above the REIT’s peer average median income.Only Federal Realty Trust (FRT) has a higher figure.Higher median incomes mean that consumers in the area can afford to purchase higher priced items.

Instead of a “one size fits all” mentality for its properties, Whitestone aims to add tenants that can meet the needs of the surrounding neighborhoods.Consumers have responded well to this philosophy and Whitestone has seen demand for its properties increase.Since the REIT went public in 2010, Whitestone has seen occupancy rise from 80.3%to 90.2% as of Q4 2017.Same store sales increased 2.6% in 2017, slightly above the peer average of 2%.Shares of Whitestone have performed well in recent years.

Insert image titled: WSR vs Peers

wsr vs peers

Source: Whitestone Investor Presentation 2018, page 6

While almost every other shopping center REITs have seen their shares decline in the last twelve months, Whitestone’s stock has nearly double digit returns.The REIT has also outperformed most peers over the last three and five years.

For REITs like Whitestone, Funds From Operation, or FFO, is a better measurement of profitability and cash flow then the traditional earnings per share metric that are used to value most stocks. Because depreciation costs weigh on earnings and REITs often have high rates of depreciation, EPS is not an accurate measure of how a company is performing.

Whitestone released Q1 results on 5/7/2018 and had FFO of $0.31, a $0.01 beat of expectations, but $0.01 below Q1 2016’s total.Revenue improved almost 19% to $33.59 million, but still missed estimates of $0.23 million.

Whitestone began paying a quarterly dividend on October 1999.In April, the REIT began paying a monthly dividend.Whitestone has cut its dividend several times before, most recently for the July 2010 payment.Since then, the REIT has paid the same monthly dividend so investors looking for dividend growth will be disappointed.On the other hand, the company hasn’t cut its dividend in a very long time, making it one of the more consistent high yielding stocks on this list.The current yield is above 9%, which could make Whitestone a very nice income generating position within an investor’s portfolio.

High Yield Monthly Dividend Stock #9: Stellus Capital Investments (SCM)

Dividend Yield: 10.3%

Stellus Capital Investments is a closed-end management investment company.The company seeks to maximize total return to shareholders with high dividend income and capital appreciation.Stellus Capital is considered a regulated investment company for tax purposes.

Stellus Capital has approximately $1.5 billion in assets under management.The company is divided into two investment arms, private credit and energy private credit.The private credit division makes direct loans into medium sized companies (i.e. companies with between $5 and $50 million in EBITDA) in a wide variety of sectors such as business, technology, healthcare and retail.The energy private credit division invests in small and medium sized energy companies.

The following chart shows Stellus Capital’s portfolio and geographic diversification.

stellus portfolio

Source: Stellus Capital Investment Q1 2018 Investor Presentation, page 13

As you can see, no one industry accounts for more than 10% of the investment portfolio.Stellus Capital spreads its investments among 23 different states.Only Texas and California occupy more than 10% of the portfolio.A diversified portfolio and geography help protect the company from an industry or region specific downturn.

When it comes to earnings figures, investment companies are judged on their net investment income, or NII, rather than a traditional metric like earnings per share.NII is the amount of income left over after operating expenses are subtracted from total investment income.Stellus Capital reported first quarter for fiscal 2018 on 5/8/2018.The company reported NII of $0.28 per share, $0.02 below estimates and 15.2% below Q1 2017.The company saw total investment income of $10.91 million, a 10.6% increase from the previous year and $0.12 million above expectations.

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Disclosure: Sure Dividend is published as an information service. It includes opinions as to buying, selling and holding various stocks and other securities.

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