USOI - 83 Monthly Paying Dividend Stocks And 80 Funds For September

2023-09-18 02:18:53 ET

Summary

• Imagine stocks or funds that pay out their dividends once a month! Unlike waiting for quarterly, semi-annual, or (ugh) annual payouts, your angst waiting for money is reduced by 300% or more!
• These August U.S. exchange-traded monthly-paid (MoPay) dividends, upsides, and net gains include: 1. Stocks by yield (85); 2. Stocks by price-upside (30); 3. Closed-End-Investments, Exchange-Traded-Funds & Notes (CEICs/ETFs/ETNs) by yield >8.74% (80).
• Items: 1. Top MoPay stock gains; 2. Overall best MoPay gainers; 3. Funds vs.Equities; 4. Fund risks/rewards. All per prices as of 8/15/23.
• 85 U.S. MoPay equities priced over $5 per share and yielding 3% to 19.69% are listed here. Canadian MoPay equities are omitted but many Canadian firms are U.S.-listed OTC. 80 funds (CEICs/ETFs/ETNs) are combined US/Canadian and all 80 funds show yields over 8.94%.
• Analyst 1-year-targets revealed that investing $5k in the lowest priced five of ten top-yield MoPay US exchange equities could produce 48.21% LESS gain than $5k invested in all ten. Bigger (higher priced) MoPay dogs took a lead by over four and three quarters lengths in August.

Foreword

All but three equities and all but one of the funds listed in this September batch of monthly-paying dividend dogs live up to the ideal of paying annual dividends from a $1K investment exceeding their single share price. Here, in the MoPay collection, lie affordable (yet volatile and risky) bargains. The dogcatcher rule of thumb is: one metric ($1k invested income > 1 share price) fits all!

Now, nearly three and one-half years past the 2020 Ides of March market dip, and before other pull-backs yet to come, the time to buy top-yield MoPay dogs may be now.

Actionable Conclusions (1-10): Brokers Estimated Top Ten MoPay Equities Could Net 15.13% to 103.42% Gains By September 2024

Seven of ten top-yield MoPay stocks (shaded in the chart below) were verified as being among the top-ten gainers for the coming year based on analyst one-year target prices. Thus, the Dogcatcher yield-based strategy for this MoPay group, as graded by broker estimates this month, proved 70% accurate.

Estimated dividend payouts from $1000 invested in each of the ten highest-yielding stocks, plus analysts' median 1yr target prices for those stocks, as reported by YCharts, produced the gains estimates below. (Note: target prices from lone analysts were not counted.) Ten probable profit-generating trades to September 2024 were:

Orchid Island Capital, Inc. (ORC) netted $1,034.21 based on the median of target price estimates from 2 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 64% greater than the market as a whole.

Slate Grocery REIT ( SRRTF ) netted $446.35 based on the median of target price estimates from 2 analysts, plus Dividends less broker fees. The Beta number showed this estimate subject to risk/volatility 48% greater than the market as a whole.

Ellington Residential Mortgage REIT ( EARN ) was forecast to net $372.67 based on the median of target price estimates from 2 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 78% greater than the market as a whole.

Modiv Industrial, Inc. ( MDV ) netted $249.97 based on the median of target price estimates from 6 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 72% greater than the market as a whole.

Stellus Capital Investment Corp. ( SCM ) netted $195.09, based on the median of target price estimates from 6 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 21% greater than the market as a whole.

Dynex Capital, Inc. ( DX ) netted $193.07 based on the median of target price estimates from 3 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 20% greater than the market as a whole.

Ellington Financial Inc. ( EFC ) netted $187.89 based on the median of target price estimates from 8 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 86% greater than the market as a whole.

AGNC Investment Corp. ( AGNC ) netted $173.33 based on the median of target estimates from 10 analysts, plus estimated annual dividends less broker fees. The Beta number showed this estimate subject to risk/volatility 23% over the market as a whole.

PennantPark Floating Rate Capital ( PFLT ) netted $161.16 based on the median of target price estimates from 5 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 65% greater than the market as a whole.

Gladstone Commercial Corp. ( GOOD ) netted $151.29 based on the median of annual price estimates from 3 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 12% greater than the market as a whole.

Average net gain in dividend and price was 31.65% on $1k invested in each of these ten MoPay stocks. This gain estimate was subject to average risk/volatility 49% greater than the market as a whole.

The Dividend Dogs Rule

Stocks earned the "dog" moniker by exhibiting three traits: (1) paying reliable, repeating dividends, (2) their prices fell to where (3) yield (dividend/price) grew higher than their peers. Thus, the highest-yielding stocks in any collection became known as "dogs." More specifically, these are, in fact, best called "underdogs".

September’s Monthly Pay Dividend Data

Three lists produce numerous actionable conclusions and several more un-numbered results. To draw these conclusions and results, September 14, 2023 closing prices and estimated annual dividends were referenced from YCharts. In the process, monthly pay equity (1) yield and (2) upside potential lists were compared and contrasted against (3) the high yield (and higher risk) MoPay CEICs/ETFs/ETNs list.

Monthly Pay Dividend Qualities

Quarterly, Semi-Annual, and Annual dividend investors anxiously await announcements from a firm, fund, or brokerage to learn if their next dividend will be higher, lower, or paid at all.

Monthly pay stocks, funds, trusts, and partnerships inform the holder every four and one-third weeks by check and/or statement. If the entity reduces or suspends a payment, the holder can sell out of the investment immediately to cut future losses.

This advantage has been curtailed when companies suddenly cut monthly dividends to save cash. Numerous prominent MoPay firms declared dividend cuts between May and June 2020, including: Oxford Square Capital Corp. (OXSQ); Partners Real Estate Investment Trust; Orchid Island Capital, Inc.; Cross Timbers Royalty Trust (CRT); H&R Real Estate Investment Trust ([[HRUFF]], [[HR.UN:CA]]); BTB Real Estate Investment Trust ([[BTBIF]], [[BTB.UN:CA]]); American Finance Trust Inc. (RTL); Mesa Royalty Trust (MTR); Solar Senior Capital Ltd; Ellington Financial Inc.; Dividend Select 15 Corp. (DVVDF); Chesswood Group Limited ([[CHWWF]], [[CHW:CA]]); Sabine Royalty Trust (SBR); TORC Oil & Gas Ltd.; Freehold Royalties Ltd. ([[FRHLF]], [[FRU:CA]]); ARC Resources Ltd. ([[AETUF]], [[ARX:CA]]); Inter Pipeline Ltd.; San Juan Basin Royalty Trust (SJT); Ag Growth International Inc. ([[AGGZF]], [[AFN:CA]]).

Former MoPay top ten regular by yield. Bluerock Residential announced in December 2019 that it was retreating to quarterly dividend payments "in keeping with industry tradition." Bluerock Residential Company has since gone private and is no longer listed publicly. That “industry tradition” continued with ARMOUR Residential REIT (ARR) and Stellus Capital Investment Corp. both transitioned to QPay in June 2020. Within three months, however, both SCM and ARR returned to MoPay mode.

Top yield stock for July 2018, June 2021, and September 2023, Orchid Island Capital, released this cautionary note with its monthly dividend announcements back in 2018: "The Company has not established a minimum distribution payment level and is not assured of its ability to make distributions to stockholders in the future." ORC directors proceeded to back up their words with actions, cutting the dividend from $0.14 to $0.11 in February, to $0.09 in March, to $0.08 in September 2018, and to $0.055 for May 2020. However, in August 2020, ORC monthly dividend increased from $0.06 to $0.065 for September, October, and into 2021. ORC currently pays a $0.16 monthly dividend and is again listed here.

The U.S. exchange MoPay segment is volatile, transitive, and recovering, and in 2023, has achieved recovery to full strength. More trades in monthly pay equities are available from Canadian firms, many of which are also listed on U.S. OTC (Pink Sheet) exchanges. Active listed MoPays priced over $2 were up from 71 in October to 73 in February 2021, and since October 2021 at the full strength of over 100 active, not seen for years. This list found itself pared to 83 by keeping the share price limit at $5 and not listing dividends yielding under 3%.

List One:

US Exchange-Traded MoPay Dividend Equities by Yield

Top ten of these US exchange-listed monthly pay dividend equities showing the best yields for September represented just two of the eleven Morningstar market sectors. Representative firms split 6 and 4 between the real estate and financial services sectors.

First place went to the first of six real estate representatives: Orchid Island Capital [1]. The others placed third, through sixth, and eighth: Ellington Residential Mortgage REIT [3]; AGNC Investment Corp. [4]; Ellington Financial Inc. [5]; Dynex Capital, Inc. [6]; Northwest Healthcare Properties Real Estate Investment Trust ( NWHUF ) [8].

Second, seventh, ninth, and tenth places went to the financial services sector members, Banco BBVA Argentina S.A. ( BBAR ) [2], Prospect Capital Corp. ( PSEC ) [7], Stellus Capital Investment Corp. [9], and PennantPark Floating Rate Capital [10], which completed the September MoPay top-ten equities list by yield.

List Two:

Monthly Pay Dividend Equities by Price Upsides (and Downsides)

Results from YCharts, shown below, show 30 MoPay dividend stocks (as of market closing price September 14) compared with the median of analyst target prices one year out. The ten top stocks displayed 5.73% to 84.21% price upsides for the next year based on analyst estimates.

Three (tinted) of ten on this top ten price upside list were also members of the top ten list by yield. The first five places on this upside list went to: Orchid Island Capital, Inc. [1], Slate Grocery REIT [2], Ellington Residential [3], Modiv Industrial, Inc. [4], and Stellus Capital Investment Corp. [5].

The lower level (by yield) five were Dynex Capital, Inc. [6], Gladstone Commercial Corp. [7], Ellington Financial Inc. [8], PennantPark Floating Rate Capital [9], and Gladstone Capital [10].

Price upside, of course, was defined as the difference between the current price and analyst target one-year median price targets for each stock.

Ten MoPay stocks showing the top estimated price gains for September 2024 were gleaned from 30 selected by yield. Three to nine analysts have historically provided the most accurate median target price estimates.

List Three:

MoPay Dividend Closed-End Investment Companies, Exchange-Traded Funds, and Notes by Yield

Eighty top monthly dividend-paying Closed-End Funds, Exchange-Traded Funds, and Notes listed below were culled from nearly 800 candidates. Yields of 19.5% or greater, calculated as of September 14, determined the top ten. All 80 show assets under management [AUM] greater than $10M and are priced above $8 per share.

The top-ten monthly-paying dividend investment companies, funds, & notes showing the biggest yields per YCharts & YahooFinance data featured five open-ended investment companies [ETFs], two closed-ended investment companies [CEICs], and three uncollateralized debt instruments [ETNs].

The five open-ended investment companies [ETFs] placed first through fourth and tenth: YieldMax TSLA Option Income Strategy ETF ( TSLY ) [1], Quadratic Deflation ETF ( BNDD ) [2], KraneShares China Internet And Covered Call Strategy ETF ( KLIP ) [3], YieldMax ARKK Option Income Strategy ETF (OARK) [4], and ProShares Bitcoin Strategy ETF ( BITO ) [10].

Then three uncollateralized debt instrument companies (ETNs) placed sixth, seventh, and ninth: Credit Suisse X-Links Crude Oil Shares Covered Call ETNs ( USOI ) [6], Credit Suisse X-Links Silver Shares Covered Call ETN ( SLVO ) [7], and ETRACS Monthly Pay 1.5X Leveraged Mortgage REIT ETN ( MVRL ) [9].

Finally, two closed-end investment companies (CEICs) placed fifth and eighth. They were: Eagle Point Credit Co LLC ( ECC ) [5] and PIMCO Dynamic Income Opportunities Fund [fixed] ( PDO ) [8] to complete the top-ten Exchange-Traded Notes, Exchange-Traded Funds, and Closed-End Investment Companies list for September 2023-24.

Compare Equity To Fund Performance

Note that September 2023-24 top ten equity dividends are currently priced 2% under those of the top ten funds. Last September, they were 2% higher. Last June, they were 1% higher. The price differences were found in the outlandishly high dividends attributed to the top equities or funds. Without those odd aberrations, funds are generally priced higher than equities due to the higher overhead costs of fund management.

Background and Actionable Conclusions

In June 2012, readers suggested the author include these funds, trusts, and partnerships in the MoPay article. A list of MoPay equities to buy and hold in September 2012 resulted from those reader suggestions supplemented with a high-yield collection from here . That list was supplemented by an upside potential article in October and a Monthly Pay Dividend Dogs: November 'Upsiders' Vs. 'Buy And Holders' vs. buy & hold in November. Another list factored December 2012 reader comments.

Now we have a new decade of 2020 that began in January and continued to February , March , April , early May , and mid-May , June , July , August , September , October , November , and December . The progression continued in 2021 in January , February , March , April , May , June , July , August , September , October , November , and December . And carried on in 2022 January , February , March , April , May , June/July , August , September , October , November , December , and again in 2023 January , February , March , April , May , June , July , August , and now September, we compare and contrast MoPay equity upside potential to the yield (and higher risk/volatility) should one be tempted to buy and hold Closed-End Investments or Exchange-Traded Funds and Notes.

Yield Metrics Showed A 27.71% Advantage For The Five Lowest-Priced Of Ten High-Yield MoPay Equities In September

Ten monthly pay stock equities were ranked by yield. Those results, verified by YCharts and YahooFinance, produced the following charts.

Actionable Conclusions: Analysts Estimated 5 Lowest Priced of Top-Ten High-Yield MoPay Dividend Stocks (11) Would Produce 32.17% VS. (12) 25.19% Net Gains from All Ten by September 2024

$5000 invested as $1k in each of the five lowest priced stocks in the top-ten MoPay dividend dog kennel by yield were predicted by analyst 1-year targets to deliver 27.71% more net gain than $5,000 invested as $.5k in all ten. The fifth lowest-priced MoPay dividend dog, Orchid Island Capital, Inc., was predicted to deliver the best net gain of 103.42%.

Lowest-priced five MoPay dividend stocks estimated as of September 14 were: Banco BBVA Argentina S.A.; Northwest Healthcare Properties Real Estate Investment Trust; Prospect Capital Corp.; Ellington Residential Mortgage REIT; Orchid Island Capital, Inc., with prices ranging from $5.11 to $9.50.

Higher-priced five MoPay dividend equities, estimated as of August 15, were: AGNC Investment Corp.; PennantPark Floating Rate Capital; Dynex Capital, Inc.; Ellington Financial Inc.; Stellus Capital Investment Corp., whose prices ranged from $10.09 to $13.94.

This distinction between five low-priced dividend dogs and the general field of ten reflects the "basic method" Michael B. O'Higgins employed for beating the Dow. The same technique, you now see, is today useful to find long-term rewarding dogs in the MoPay kennel.

The added scale of projected gains, based on analyst targets, contributed a unique element of "market sentiment" gauging upside potential. It provided a here-and-now equivalent of waiting a year to find out what might happen in the market. It is also the work analysts got paid big bucks to do.

Caution is advised, however, as analysts are historically 15% to 85% accurate on the direction of change and about 0% to 15% accurate on the degree of the change.

Gains/declines as reported do not factor in any tax problems resulting from dividend, profit, or return of capital distributions. Consult your tax advisor regarding the source and consequences of "dividends" from any investment.

Afterword

If somehow you missed the suggestion of the stocks ripe for picking at the start of this article, here is a reprise of the list at the end:

September MoPay Equities List

(Alphabetical by Ticker Symbol)

All but three equities and all but one of the funds listed in this September collection of monthly-paying dividend dogs live up to the ideal of annual dividends from $1K invested exceeding their single share price. Here in the MoPay collection lie affordable yet volatile and risky bargains.

September Ideal MoPay Equities List

(Dividend from $1K Invested > Share Price)

Nearly three and one-half years beyond the 2020 Ides of March dip and before other pull-backs yet to come, the time to buy top-yield MoPay dogs may now be at hand. There have been more to choose from. This month's list of 85 let the maximum yield top 19%, setting the minimum price per share for selection at $5, and holding the minimum yields to 3%, thus, August was down four from July, which was up four from June. When bears are back, bargains reappear.

Stocks listed above were suggested only as decent starting points for your MoPay dividend stock purchase or sale research process. These were not recommendations.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, recommendation or endorsement to buy or sell any security. Prices and returns on equities in this article except as noted are listed without consideration of fees, commissions, taxes, penalties, or interest payable due to purchasing, holding, or selling same.

Graphs and charts were compiled by Rydlun & Co., LLC from data derived from www.ycharts.com ; www.dividend.com ; finance.yahoo.com ; analyst mean target price by YCharts. O pen source dog art from dividenddogcatcher.com.

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