9 Top Monthly Dividend Stocks UK to Watch in 2024
The most common type of dividend payment from a publicly traded company is paid quarterly. However, some companies will pay monthly dividends. This is a share in the profits that many income investors use as an additional income stream, on top of any potential appreciation in the share price.
While not all UK companies will pay monthly dividends, UK investors are not restricted to just domestic stocks. In this article, we will share some of the top monthly dividend stocks from around the world to watch this year and how to invest in them.
Table of Contents
How do Monthly Dividend Stocks Work?
To understand how monthly dividend stocks work, we first need to understand whatis a dividend. A dividend is a share of company earnings that is paid to the company’s stockholders. Not all companies will pay dividends and the ones that do will pay biannually, quarterly or monthly.
Dividends are approved by the company’s board of directors who also announce when the dividend will be paid and the amount. Income investors may choose to receive the dividend as a form of income, whereas capital growth investors may choose to reinvest the dividend to buy more shares.
Some companies have a long track record of paying dividends. Alcoholic drinks giant Diageo has a track record of paying dividends every year for the past 20 years at an annual compounded rate of 7%.
In times of economic uncertainty companies may decide to remove the dividend. Instead, they may choose to reinvest the company’s earnings into the business to facilitate more growth. However, investors would not just look at dividends to aid in their decision-making.
Analysing company fundamental analysis such as upcoming product launches, changes in management, sector strength and earnings data is also important in analysing a stock. Some traders would also use technical analysis which is the study of chart patterns and price behaviour.
List of 9 Monthly Dividend Stocks and ETFs
Below is a list of the top 9 monthly dividend stocks and ETFs (exchange-traded funds). How did we choose this list? First, we checked to ensure each company pays a monthly dividend. We also checked that each company's share price is available to purchase from the Admirals Invest.MT5 account which collects dividend payments for you.
Did you know that the Invest.MT5 account allows you to:
- Invest in UK stocks and ETFs with a commission of 0.1% of the trade value and a low minimum transaction fee of just 1 GBP.
- Invest in US stocks and ETFs with a commission of $0.02 per share and a minimum transaction fee of just 1 USD.
This means that as a UK investor, you can purchase stocks that pay monthly dividends from UK and US companies.
1. ARMOUR Residential REIT
- Industry: Mortgage REITs
- Ticker: ARR
- Country: US
- Dividend Yield: 19.77%
ARMOUR Residential REIT is a real estate investment trust. The trust invests in fixed-rate and adjustable-rate residential mortgage-backed securities. The securities are issued by US government-sponsored entities which include the Federal Home Long Mortgage Corporation, Federal National Mortgage Association and by the Government National Mortgage Administration.
2. Prospect Capital Corp
- Industry: Asset Management and Custody Banks
- Ticker: PSEC
- Country: US
- Dividend Yield: 9.81%
Prospect Capital Corp is a Business Development Company (BDC) engaged in making debt and equity investments in middle-market businesses operating in the US. It currently has $7.7 billion in assets under management with investments in over 400 projects and more than $3.8 billion in declared dividends.
3. LTC Properties Inc
- Industry: Healthcare REITs
- Ticker: LTCNY
- Country: US
- Dividend Yield: 6.03%
LTC Properties is a healthcare real estate trust that invests in housing for seniors. The company primarily focuses on structured finance solutions, joint ventures, mortgage financing and sale-leasebacks. 50% of the portfolio houses seniors and 50% houses skilled nurses, totalling more than 204 investments across 29 states.
4. Apple Hospitality REIT
- Industry: Hotel and Resort REITs
- Ticker: APLE
- Country: US
- Dividend Yield: 5.81%
Apple Hospitality REIT is a real estate investment trust that owns one of the largest portfolios of upscale hotels in the United States. Its portfolio consists of 96 Marriott-branded hotels, 199 Hilton-branded hotels and 4 Hyatt-branded hotels.
5. iShares J.P. Morgan USD EM Bond ETF
- Industry: Emerging Market Bonds
- Ticker: IEMB
- Country: UK
- Dividend Yield: 5.58%
The iShares J.P. Morgan USD Emerging Market Bond fund aims to provide diversified exposure to emerging market bonds issued in US dollars. Currently, the fund has 91.55% invested in government bonds and 8.03% invested in corporate bonds.
The biggest holding in the fund is a 0.82% portfolio weight to a Republic of Ecuador 2.5% government bond, followed by a 0.78% portfolio weighting in a State of Kuwait 3.5% government bond. There are 588 bond holdings in the fund from a range of different countries including Qatar, Kazakhstan, Argentina, Brazil, Uruguay and many others.
6. Realty Income
- Industry: Retail REITs
- Ticker: O
- Country: US
- Dividend Yield: 4.57%
Realty Income is a real estate investment trust that primarily invests in commercial properties in the United Kingdom, United States and Spain. The company is headquartered in San Diego, California and currently owns 11,288 properties. Its largest tenants include Walgreens, 7-Eleven, Dollar General, Sainsbury’s, LA Fitness and many others.
7. Stag Industrial
- Industry: Industrial REITs
- Ticker: STAG
- Country: US
- Dividend Yield: 4.27%
Stag Industrial is a real estate investment trust that focuses on the acquisition and operation of industrial properties in the United States. It currently operates 563 buildings totalling 111.6 million square feet across 41 states. Stag’s enterprise value stands at $7.7 billion.
8. Agree Realty Corp
- Industry: Retail REITs
- Ticker: ADC
- Country: US
- Dividend Yield: 3.89%
Agree Realty Corp is a real estate investment trust that focuses on the development and acquisition of net lease retail properties throughout the United States. It currently operates 1,707 properties totalling 36 million square feet and includes tenants such as Best Buy, Autozone, Dollar General, Home Depot and many others.
9. Gladstone Land Corp
- Industry: Specialized REITs
- Ticker: LAND.US
- Country: US
- Dividend Yield: 2.81%
Gladstone Land Corp is an agriculture real estate investment trust. The company is externally managed and engages in the owning and leasing of farmland. Currently, it owns around 164 farms across 15 states in the United States primarily focusing on fruit and vegetable croplands.
Are Monthly Dividend Stocks a Good Investment?
One of the main advantages of monthly dividend stocks is that the investor receives their dividends each month, rather than waiting for the end of the quarter or, for some stocks, every six months. This means investors can use monthly dividends as more of an income stream or use it to reinvest and purchase more shares.
There are also some disadvantages of monthly dividend stocks. Most stocks which pay monthly dividends are internationally based, such as in the U.S. While UK investors can purchase U.S. stocks with competitive fees, there is an exchange rate risk to be mindful of. Of course, there is also the case a company can simply stop paying dividends. Furthermore, if a company's share price is declining and falling in value, then the monthly dividend payments may not cover the loss of value in the share price.
How to Invest in Monthly Dividend Stocks & ETFs
With the Admirals Invest.MT5 account you can invest in stocks and ETFs from 15 of the largest stock exchanges around the world, including the ones listed above.
- Open a demo or live Invest.MT5 account.
- Deposit real funds in your account unless you are using virtual funds from a demo account.
- Open the stock trading software provided by Admirals which is a web version or desktop version of MetaTrader 5.
- Choose your instruments. Select from thousands of dividend stocks and ETFs from all over the world.
- Invest and start collecting dividend payments.
FAQs on Monthly Dividend Stocks
Which UK company pays the highest dividend?
Currently, Diversified Energy Company pays the highest dividend yield of 30.54%. Of the companies in the FTSE 100, British American Tobacco pays the highest dividend yield of 9.83%.
What is the top 5 best stocks that pay monthly dividends?
The top five best stocks that pay monthly dividends include ARMOUT Residential REIT, Prospect Capital Corp, LTC Properties Inc, Apple Hospitality REIT and the iShares J.P. Morgan USD EM Bond ETF.
What is the safest highest paying dividend stock?
Unfortunately, there are no guarantees when it comes to investing and share prices can collapse instantly. To mitigate the risk, the safest dividend stocks are likely to be the largest stocks with good compliance measures within them and part of the FTSE 100. Of the stocks in the FTSE 100 index, British American Tobacco pays the highest dividend of 9.83%.
Continue Reading:
- Dividend Investing Guide
- Best Dividend ETFs
- Best UK Shares
- Best UK Stocks for Dividends
- Best Short-Term Investments UK
- Top 10 Penny Stocks UK
- Best Small Cap Stocks UK
- Top 20 Biggest Companies in the UK
- Best UK Tracker Funds
INFORMATION ABOUT ANALYTICAL MATERIALS:
The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals investment firms operating under the Admirals trademark (hereinafter “Admirals”). Before making any investment decisions please pay close attention to the following:
1. This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
2. Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
3. With view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for prevention and management of conflicts of interest.
4. The Analysis is prepared by an independent analyst, Jitan Solanki, (hereinafter “Author”) based on personal estimations.
5. Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis.
6. Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admirals for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
7. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.
