The following is an excerpt from 7 Top Monthly Dividend Stocks and Funds to Buy, originally published on Kiplinger’s.
The mortgage is due every month. So are utility bills, car payments and the membership to the gym that many of us don’t actually use.
That’s not a major problem for many people because they get regular paychecks. But when they eventually retire, it would be nice to at least partially match income to their expenses.
Enter monthly dividend stocks. While bonds generally pay twice per year and most American stocks pay quarterly, a few select few stocks, ETFs and closed-end funds pay monthly, making them ideally suited for retirees living off their investments.
Naturally, you should be skeptical of gimmicky stocks, and you should never buy a stock simply because it pays a monthly dividend. Any investment you buy should meet your basic smell test for quality and should be attractively priced.
Thankfully, plenty of monthly dividend stocks make the cut. Today, we’re going to take a look at a diverse lot of seven monthly payers. Three are high-quality REITs, two are conservative ETFs, one is a dirt-cheap closed-end fund and one is a more speculative business development company trading at a deep discount. But all have one thing in common: They pay their dividends monthly.
Certain “oddball” dividend payersdon’t have a built-in base of buyers or that institutional investors tend to avoid because they don’t fit nicely into a style box. This tends to make them perpetual value stocks.
One such quirky stock is EPR Properties (EPR), a REIT that specializes in entertainment and educational properties.
Most REITs specialize in broad categories of real estate, such as offices or apartments. EPR’s specialty is far narrower. Forty-four percent of its portfolio is invested in entertainment properties, primarily movie theaters. Another 32% is invested in recreational properties, such as TopGolf driving ranges and ski resorts. And 21% of the portfolio is invested in educational properties such as charter schools and daycare centers. It’s an eclectic mix you’re not going to find anywhere else.
EPR Properties also sports a high yield that you’re unlikely to find anywhere else without taking a lot more risk. EPR boasts a 7.3% dividend at the moment, and it has grown its payout at about 7% per year since 2010.
REITs have gotten absolutely thrashed over the past year, and EPR is no exception. Its stock has lost more than a quarter of its value in less than a year, and the selloff might not even be over yet. But at today’s prices, expect EPR to deliver solid, market-beating returns over at least the next five years.
To continue reading, see 7 Top Monthly Dividend Stocks and Funds to Buy.
Disclosures: Long EPR