10 Inexpensive Monthly Dividend Stocks With High Yields

10 Inexpensive Monthly Dividend Stocks With High Yields

In this article, we discuss the 10 cheap monthly dividend stocks with high yields. If you want to skip our detailed analysis of these stocks, go directly to 5 Inexpensive Monthly Dividend Stocks With High Yields.

The importance of dividend investing returned to center stage in 2022 as the stock market crashed, inflation soared to new heights, and the Fed became extremely hawkish. As cryptocurrencies and tech growth stocks fell to new lows, investors rushed to find stocks that are stable and also pay consistent income. As companies in the United States begin mass layoffs, average retail investors are also on the lookout for reliable dividend-paying stocks that can promise steady income.

Study after study has proven the effectiveness of dividend investing. For example, in a detailed report on dividend investing, Heartland Advisors cites research that tracked the total return of the US stock market over a period from 1802 to 2002. During this period, dividend-paying stocks accounted for 5 .8% of 7.9% annualized total returns. The same study also mentions another research, from the London Business School, which highlights the importance of dividend investing as it relates to global markets. This study shows that from 1900 to 2005, the real stock market return in 17 countries was around 5%, while the average return for these countries during this period was 4.5%.

However, Heartland Advisors’ research report points out that the outperformance of dividend-paying stocks relative to their peers takes on its real effect when viewed from a long-term perspective. Several datasets in the report assume an investment period of 20 years, while acknowledging that investors typically don’t hold stocks for two decades. Nevertheless, an important trend observed in the study is that over 20-year periods, dividend payers generally outperform dividend payers. Therefore, it is important for income investors to find long-term dividend-paying stocks and own them if they really want to reap the benefits of split investing.

While this article looks at high yielding dividend stocks, it should be noted that high yields have some downsides. A detailed research report published by Fidelity in 2012 indicates that high yielding dividend stocks are more vulnerable to dividend cuts and suspensions. The study indicates that on average over the past two decades, 10% of stocks with the highest dividend yields have suspended or reduced their dividends. In 2009, this percentage rose to 40%. Another important data point mentioned in the study shows that on average, the company that cut or suspended its dividend underperformed the market by more than 23% in the 12 months preceding the official announcement of the reduction or suspension of the dividend.

Therefore, high-yield dividend stocks may be suitable if you are looking for short-term gains, but if you are a long-term investor and plan to enjoy the benefits of reinvested dividends and want to avoid volatility and uncertainty, you should carefully choose dividend-paying stocks that have sustainable returns.

Another important research report that is extremely relevant to the current market environment is that of Vanguard. This study, published in 2017, indicates that the best bet for investors who want to avoid risk is to invest for both dividends and capital appreciation. The study calls this a “total return perspective.” The study also states that “replacing dividend-oriented stocks with fixed-income securities dramatically increases a portfolio’s risk profile” and decreases its downside protection. However, the report notes that dividend-oriented stocks tend to be more interest rate sensitive, making them susceptible to volatility when bond yields change. This is exactly what is happening in 2022, as several REIT dividend stocks rebounded in October 2022 based on bond market moves, while many others slumped.

Vanguard’s study takes an in-depth look at the two famous perspectives of dividend investing. The first perspective relates to high dividend yield investing, in which investors are always interested in high dividend yield stocks. The other perspective focuses more on dividend growth and prefers companies that have a history of consistent dividend increases. The study also cites the “dividend mismatch theory” that if a company does not pay dividends, it will either invest in its business or buy back shares, virtually increasing returns for investors. However, the stock market crash of 2022 has made it impossible to consider dividends “irrelevant” as it is clear that mature dividend-paying companies that have strong businesses are the best bets for investors for at least several months to come. , as the world goes through many geopolitical situations and economic challenges.

In this article, we have selected relatively cheap stocks that pay monthly dividends. These stocks can be solid options for those who can tolerate risk and are looking for high yielding dividend stocks. As mentioned above, high-yield dividend stocks carry their own risks, and one should always seek to offset risk through diversification.

Cheap Monthly Dividend Stocks with High Yields

10. AGNC Investment Company (NASDAQ: AGNC)

AGNC Investment Corp. (NASDAQ: AGNC) is a United States-based REIT that invests in pass-through residential mortgage-backed securities and secured mortgage bonds. It is one of the best performing monthly dividend stocks in the market, yielding over 17% on 5 November. Last month, AGNC Investment Corp. (NASDAQ: AGNC) said its board of directors had declared a cash dividend of $0.12 per share, payable Nov. 9 to shareholders of record as of Oct. 31. The stock is in the limelight after the company beat analysts’ estimates for the third quarter. The company said its results were helped by its effective asset repositioning and large hedge position.

AGNC Investment Corp. (NASDAQ: AGNC) saw an uptick in hedge fund sentiment in the second quarter, with 18 funds reporting holding stakes in the company at the end of June, compared to 14 funds in the previous quarter.

9. Cross Timbers Royalty Trust (NYSE: CRT)

Cross Timbers Royalty Trust (NYSE: CRT) is currently in the news, but not for very positive reasons. Cross Timbers Royalty Trust (NYSE: CRT) recently announced that it was cutting its monthly dividend by approximately 25%. The company last month announced its monthly dividend of $0.1491 per share, up from its previous dividend of $0.2004. Still, the stock’s forward dividend yield came in at 7.75%, making the stock one of the decent options for investors looking for cheap dividend-paying stocks. The stock is trading at around $20 as of November 5.

8. Dynex Capital, Inc. (NYSE: DX)

Dynex Capital, Inc. (NYSE: DX) is a Virginia-based mortgage REIT that invests in leveraged mortgage-backed securities (MBS) in the United States. Dynex Capital, Inc. (NYSE: DX) also felt the heat due to the current macroeconomic situation during the third quarter. Its third-quarter earnings were hit by widening spreads. Dynex Capital, Inc. (NYSE: DX) fell 15% in the quarter compared to the prior quarter. Adjusted EPS for the quarter came in at $0.24, below the average estimate of $0.31. Dynex Capital, Inc. (NYSE: DX) management said “extreme volatility in interest rates” and widening spreads were the reasons for the weak quarterly results.

However, hedge funds began to take interest in the REIT during the June quarter. 13 hedge funds in our database reported holding stakes in the company at the end of the second quarter, compared to just 6 in the previous quarter.

7. Gladstone Capital Corporation (NASDAQ:GLAD)

Gladstone Capital Corporation (NASDAQ:GLAD) is a Virginia-based company that specializes in debt refinancing, investments in senior term loans, and revolving loans, among many other services. The company has a dividend yield of over 8%. On October 11, Gladstone Capital Corporation (NASDAQ:GLAD) announced a 3.7% increase in its monthly dividend. It announced a dividend of $0.07 per common share for October, November and December 2022.

At the end of the second quarter, 7 hedge funds tracked by Insider Monkey held stakes in Gladstone Capital Corporation (NASDAQ:GLAD), against only 3 funds in the previous quarter. The company’s largest shareholder in our database was billionaire Izzy Englander’s Millennium Management, which has a $3.8 million stake in the company.

6. Generation Income Properties, Inc. (NASDAQ: GIPR)

Trading at around $5, Generation Income Properties, Inc. (NASDAQ: GIPR) is one of the cheap monthly dividend stocks available in the market. However, the company recently announced a 27% cut in its dividend for the last three months of this year. Generation Income Properties declared a dividend of $0.039 per share, 27.8% lower than the previous dividend of $0.054.

Generation Income Properties, Inc. (NASDAQ: GIPR) is a Florida-based REIT that owns a portfolio of single-tenant properties.

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Disclosure: none. 10 Inexpensive Monthly Dividend Stocks With High Yields is originally published on Insider Monkey.

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