For investors who rely on their portfolios to generate an income stream, four dividend payments a year might not be enough. Fortunately, there are stocks that distribute on a monthly basis. In this article, we are going to take a look at some relatively cheap stocks that pay monthly dividends. When it comes to finding cheap dividend-paying stocks, the first thing you should know is that it’s not about finding stocks that trade at penny stock levels. Rather, it’s about finding stocks that have low valuations. Sometimes a stock can look extremely cheap but, because the company is not profitable, it may actually be trading at expensive valuations.
One of my favorite monthly dividend stocks, Realty Income Corp (NYSE:O), is now trading at over 50 times its earnings. That’s a hefty premium given that the industry’s average price-to-earnings (P/E) ratio is at around 32 times. Moreover, Realty Income’s price-to-sales, price-to-book, and price-to-cash-flow ratios are all higher than the industry’s averages. That’s why even though Realty Income is a solid pick, it doesn’t fit into the cheap monthly dividend stocks list. And since we don’t want stocks that are cheap because their dividends are not sustainable, we need to find a balance between value and prospects. Below, I have compiled a list of five relatively cheap monthly dividend stocks: Gladstone Investment Corporation (GAIN), Main Street Capital Corporation (MAIN), Prospect Capital Corporation (PSEC), LTC Properties Inc (LTC) and EPR Properties Real Estate Trust (EPR).
Source: Income Investor
Related Articles:
- What Determines A Dividend Stock's Yield
- 7 Dividend Stocks Yielding Over 3%, With Tiny Payout Ratios
- 10 Stocks With Sustainable Dividend Growth
- 12 Dividend Growth Stocks With A Good Yield/Growth Mix
- Who is Ben Grossbaum and Why Should We Listen to Him?
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LTC is only name I'm considering form the list though I have seen the others in quite a few portfolios online. Thanks for sharing.