How Have Dividend Aristocrats Performed Compared to the S&P 500 In the Last Decade?

3 Best Monthly Paying Dividend Stocks For 2022

Stocks such as Pembina Pipeline, SL Green Realty and Realty Income pay dividends each month, making them attractive to income investors.

There is a way for equity investors to generate a steady stream of recurring income during periods of sustained sell-off. No, I’m not asking you to invest in low-yield fixed-income products. Instead, it makes sense to identify quality companies with wide economic moats and robust cash flows, allowing them to pay investors a dividend, creating an alternate stream of income. 

Historically, dividend-paying stocks have outpaced the broader markets over the long term. Investing in dividend stocks enables investors to benefit from a predictable income stream and long-term capital gains. 

Further, dividend stocks may have a lower beta, suggesting they remain steady when markets are in turmoil. While most companies pay investors a quarterly dividend, a few also have a monthly payout.

Let’s look at three stocks that pay you a monthly dividend in 2022. 

Pembina Pipeline

A Canada-based midstream company, Pembina Pipeline (NYSE: PBA), pays investors a monthly dividend of $0.1625 per share, indicating a forward yield of a tasty 5.44%. It has a diversified revenue base, as Pembina operates pipelines, storage terminals, and export facilities. Most of its cash flows are backed by long-term contracts making Pembina relatively immune to fluctuations in commodity prices. 

It’s a leading energy infrastructure company with a widening portfolio of cash-generating assets. 

The company has a track record of profitable growth, and its strong balance sheet has allowed Pembina to increase dividend payouts at an annual rate of 4.5% in the last decade. Pembina started distributing dividends in 1997 and has paid over $11 billion to shareholders in payouts to date. 

Analysts tracking Pembina stock expect its earnings to rise at an annual rate of 18.2% over the next five years. Its valuation is extremely attractive given a forward price to earnings multiple of 16x. 

Realty Income

One of the world’s largest real estate investment trusts (REIT), Realty Income (NYSE: O), has a portfolio of single-tenant properties leased out to blue-chip tenants. These tenants look after operating and maintenance costs as well as expenses related to taxes and insurance. 

In Q1 of 2022, Realty Income increased adjusted funds from operations by 14% to $0.98 per share. Comparatively, it pays investors quarterly dividends of $0.7425 per share, translating to a monthly dividend of $0.2475 per share, which indicates a forward yield of 4.3%. 

In the March quarter, Realty Income invested $1.56 billion in 213 properties, including close to $800 million in Europe. The company has strong financials and has increased dividends by 5.9% annually since July 2012. It has now increased these payouts for 98 consecutive quarters. 

At the end of Q1, Realty Income’s portfolio comprised 11,288 properties across the U.S., Spain, the UK, and Puerto Rico. These properties are leased to 1,090 clients with a weighted average remaining lease term of 8.9 years. 

SL Green Realty

SL Green Realty (NYSE: SLG) is another REIT that makes the list of monthly paying dividend stocks. In Q1, SL Green’s funds from operations (FFO) stood at $115.8 million or $1.65 per share compared to FFO of $128.3 million or $1.73 per share in the year-ago period. 

Its same-store cash net operating income rose 12.4% in Q1 as it signed 37 office leases taking the total of its Manhattan office portfolio to 820,989 square feet. The average lease term on these office leases signed in Q1 is close to 10 years. 

SL Green pays investors a dividend of $0.31 per share each month, translating to a forward yield of 7.7%. 

The bottom-line on monthly dividends

Pembina Pipeline, SL Green Realty, and Realty Income all pay above-average monthly dividends to shareholders, considering their dividend yields. The three companies are well poised to increase these payouts each year in the future due to their healthy balance sheets, solid cash flows, and widening income streams. 

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