Monthly dividend stocks are attractive for income investors who are looking for more frequent payouts. Most stocks that pay dividends do so on a quarterly or semi-annual schedule. 

But monthly dividend stocks pay shareholders each month, for 12 payments per year.

There are many monthly dividend stocks that do not get much coverage in the financial media. The 3 monthly dividend stocks in this article have high yields, and pay shareholders a dividend each month.

Horizon Technology Finance Corp. (HRZN)

Horizon Technology Finance Corp. is a BDC (Business Development Company) seeking to provide venture capital to small and medium-sized companies, mainly in the life sciences, technology, healthcare-IT sectors, and sustainability, which account for around 41%, 32%, 16%, and 11% of its portfolio, respectively. 

The company has been able to generate attractive risk-adjusted returns through directly originated senior secured loans and additional capital appreciation through warrants, featuring a last-twelve-month portfolio yield of 15.9%. 

HRZN has exceeded the typical industry average IRR of around 10% from its loan coupons by engaging in commitment fees, guidance fees, and potential equity rights, maximizing its total yield. Horizon Technology has gross investment income of around $60 million annually and is based in Farmington, Connecticut. 

On October 29th, 2024, Horizon released its Q3 results for the period ending September 30th, 2024. For the quarter, total investment income fell 15.5% year-over-year to $24.6.7 million, primarily due to lower interest income on investments from the debt investment portfolio. 

More specifically, the company’s dollar-weighted annualized yield on average debt investments in Q3 of 2024 and Q3 of 2023 was 15.9% and 17.1%, respectively. Net investment income per share (IIS) fell to $0.32, down from $0.53 compared to Q3-2023. Net asset value (NAV) per share landed at $9.06, down from $9.12 sequentially. 

After paying its monthly distributions, Horizon's undistributed spillover income as of June 30th, 2024 was $1.27 per share, indicating a considerable cash cushion. As its successful due diligence record has made possible, the company has maintained quite stable dividends, paid out monthly, providing smooth capital returns to its investors.

HRZN stock currently yields 15.4%.

LTC Properties (LTC)

LTC Properties is a REIT that invests in senior housing and skilled nursing properties. Its portfolio consists of approximately 50% senior housing and 50% skilled nursing properties. Just like other healthcare REITs, LTC benefits from a strong secular trend, namely the high growth of the population that is above 80 years old.

This growth results from the aging of the baby boomers’ generation and the steady rise of life expectancy thanks to sustained progress in medical sciences. The REIT owns 194 investments in 26 states, with 31 operating partners.

In late October, LTC reported (10/29/24) financial results for the third quarter of fiscal 2024. Funds from operations (FFO) per share grew 5% over the prior year’s quarter, from $0.65 to $0.68, but missed the analysts’ consensus by $0.01.

The increase in FFO per share resulted primarily from higher income from previously transitioned properties and higher income from loan originations. LTC drastically improved its leverage ratio (Net Debt to EBITDA) from 5.3x to 4.2x thanks to various asset sales.

The REIT has most of its assets in states with the highest projected increases in the 80+ population cohort over the next decade. Moreover, LTC has been hurt by the pandemic, but this crisis has subsided. Due to the low comparison base formed this year, we expect 3.0% growth in FFO per share over the next five years.

LTC currently yields 6.1%.

Modiv Industrial (MDV)

Modiv Industrial acquires, owns, and actively manages single-tenant net-lease industrial, retail, and office properties in the United States, focusing on strategically essential and mission-critical properties with predominantly investment-grade tenants. 

As of its most recent filings, the company’s portfolio comprised 44 properties that occupied 4.6 million square feet of aggregate leasable area. Modiv has nearly 43 properties in its portfolio that occupy 4.5 million square feet of aggregate leasable area.

Modiv reported its Q3 results for the period ending September 30th, 2024. For the quarter, rental income came in at $11.6 million, down 7.3% year-over-year. This was mainly due to the elimination of some non-NNN tenant reimbursements related to the August 2023 portfolio disposition of 13 properties.

Management fee income was stable at nearly $66 million. Total income reached nearly $11.7 million, down 7.2% from $12.6 million last year. AFFO was $3.7 million, or $0.34 per diluted share, in line with AFFO of $3.7 million, or $0.33 per diluted share, in the prior year period.

Management has been primarily focused on acquiring industrial properties, but they have stated they may also target other types, including retail properties, data centers, and storage properties. For instance, in 2022, the company acquired four industrial properties and one retail property. 

Modiv’s strategy is to keep on acquiring more properties, which it hopes will be accretive to AFFO per share over time.

MDV stock currently yields 7.2%.

Disclosure: No positions in any stocks mentioned