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A popular investment strategy for those seeking to rely on passive income from their portfolio is dividend growth investing. The value of this approach lies in the fact that it allows investors to disregard the fluctuations of the stock market and concentrate solely on their income stream.By purchasing dividend stocks that pay distributions to shareholders each month, investors can streamline their passive income cash flow to fit their monthly expenses. As a result, can be appealing for income investors.In this article, we will discuss three of our favorites among the larger universe of monthly dividend stocks.
#1. Main Street Capital (MAIN)
Main Street Capital Corporation is a Business Development Company (BDC) that provides long-term debt and equity capital to lower middle market companies and debt capital to middle market companies. Main Street defines lower middle market companies as generally having annual revenues between $10 million and $150 million. The company’s investments typically support management buyouts, recapitalizations, growth financings, refinancing, and acquisitions.At the end of Q3 2023, Main Street had an interest in 79 lower middle market companies (valued at $2.2 billion), 27 middle market companies ($291 million) and 89 private loan investments ($1.5 billion).On November 1st, 2023, Main Street Capital announced a 2.1% dividend increase to $0.24 per share paid monthly. On November 1st, 2023, Main Street Capital reported third quarter 2023 results. Net investment income of $82.2 million for the quarter was a 32% increase compared to $62.4 million in Q3 2022. The corporation generated net investment income per share of $0.99, up 19% year-over-year from $0.83 per share. Distributable net investment income per share totaled $1.04, up 18% from $0.88 in Q3 2022. Main Street’s net asset value per share increased compared to December 31st, 2022, from $26.86 to $28.33, a 5.5% increase.The corporation declared monthly dividends of $0.24 to be paid in the first quarter of 2024, which are 6.7% higher than those declared a year ago, as well as a supplemental $0.225 dividend to be paid in December. MAIN stock yields 7%.
#2. Phillips Edison & Company (PECO)
Phillips Edison & Company, Inc. is a real estate investment trust that is one of the nation’s largest owners and operators of omni-channel grocery-anchored shopping centers. Additionally, the company runs a third-party investment management business providing property management and advisory services to unconsolidated joint ventures and one private fund.As of September 30th, 2023, Phillips Edison & Company’s wholly-owned portfolio consisted of 275 properties, totaling about 31.4 million square feet, located in 31 states. Phillips Edison & Company generates just over $575 million in annual revenues, pays dividends on a monthly basis, and is based in Cincinnati, Ohio.On September 5th, 2023, Phillips Edison & Company raised its dividend by 4.5% to a monthly rate of $0.0975. On October 31st, 2023, Phillips Edison & Company reported its Q3 results for the period ending September 30th, 2023.For the quarter, total revenues came in at $152.5 million, 4.7% higher year-over-year. Same-store NOI improved by 3.2% to $99.9 million, new and renewal leasing spreads landed at 26.3% and 16.9%, respectively, while occupancy remained at a record 97.8% – all of which were positive developments.The company expects 2023 FFO per share to land between $2.23 and $2.27. This implies a year-over-year growth of 4.7% at the midpoint.
#3. STAG Industrial (STAG)
STAG Industrial is an owner and operator of industrial real estate. It is focused on single-tenant industrial properties and has 563 buildings across 41 states in the United States. STAG Industrial went public in 2011 and has a market capitalization of $5.9 billion. The focus of this REIT on single-tenant properties might create higher risk compared to multi-tenant properties, as the former are either fully occupied or completely vacant.In late October, STAG Industrial reported (10/26/23) financial results for the third quarter of fiscal 2023. Core FFO per share grew 3.5% over the prior year’s quarter, from $0.57 to $0.59, exceeding the analysts’ consensus by $0.02, thanks to the sustained strength of the REIT’s tenants and material hikes in rent rates. Net operating income grew 7% over the prior year’s quarter while the occupancy rate edged down sequentially from 97.7% to 97.6% and interest expense increased 12% year-on-year due to high interest rates.STAG Industrial has proved fairly resilient to the surge of interest rates to 16-year highs thanks to its decent balance sheet. Moreover, the REIT slightly improved its guidance for core FFO per share in 2023, from $2.22-$2.26 to $2.26-$2.28.STAG Industrial currently offers a 4.2% yield and has never cut its dividend throughout its short history.More By This Author:
3 Dividend Stocks Paying Monthly Dividends And High Yields
