With most stocks distributing dividends quarterly, investors needing predictable monthly cash flow could desire more frequent payouts. This is where monthly dividend stocks come in. Monthly dividend stocks pay shareholders a dividend each month, for 12 total payments per year.
However, not all monthly dividend stocks are buys. Just because a company pays a dividend each month, does not necessarily mean the dividend is supported with underlying earnings. We currently rate the following 3 monthly dividend stocks as sells.
Prospect Capital (PSEC)
Prospect Capital Corporation is a Business Development Company, or BDC, that provides private debt and private equity to middle–market companies in the U.S. The company focuses on direct lending to owner–operated companies, as well as sponsor–backed transactions. Prospect invests primarily in first and second lien senior loans and mezzanine debt, with occasional equity investments.Â
Prospect posted first quarter earnings on November 6th, 2025. Net investment income was 17 cents per share, while total investment income plummeted 20% year-over-year to $157.6 million. While weak, these results were better than feared. The company continues to focus on rotating assets into its core business of first lien senior secured middle market loans, while reducing second lien loans. It also exited its subordinated notes portfolio, as well as equity-linked assets, including real estate properties.
Total originations were $92 million, off from $271 million in the previous quarter. Total repayments were $235 million, down from $445 million in the previous quarter. That implies net originations of -$143 million for Q1, up from -$175 million in the prior quarter. Total investments at fair value were $6.51 billion, down from $6.67 billion in the prior quarter. Interest-bearing investments yielded 11.8%, off from 12.2% in the prior quarter.
The company’s dividend has also shrunk over time as this year’s payout of $0.54 is well under half the value of the dividend from before the financial crisis. Shrinking net investment income has taken its toll on the company’s ability to finance the dividend.
Source Rock Royalties Ltd. (SRRRF)
Source Rock Royalties, is a pure-play oil and gas royalty company focused on acquiring high-netback interests across the Western Canadian Sedimentary Basin. Operating a capital-light, non-operating model, the company generates top-line revenue through Gross Overriding Royalties (GORR), which are contractual slices of production from third-party working interests, and Fee Title mineral interests, which are leased to operators for lessor royalties and signing bonuses.
Source Rock’s portfolio is heavily weighted (about 95%) toward light and heavy oil production in southeast Saskatchewan and Alberta’s Clearwater play, with assets operated by partners like Whitecap Resources and Rubellite Energy. Source Rock was founded in 2012 and headquartered in Calgary, Canada.
On December 1st, 2025, Source Rock reported its Q3 results. Royalty revenue declined 25% year over year to $1.1 million, reflecting a 12% decrease in average daily production and a 14% decline in realized oil prices. Adjusted EBITDA fell 21% year over year to $1.0 million, or $0.02 per share, while FFO fell 13% to $0.9 million, or $0.02 per share, as lower commodity pricing more than offset reductions in administrative expenses.
Net income grew year over year, with total comprehensive income of $0.3 million, translating to $0.01 per share, supported by lower depletion and share-based compensation costs.
The dividend is covered by funds from operations (C$6 million last year vs. C$3.5 million in dividends paid). However, it exceeds EPS, which might prove a problem long term, especially if oil prices decline while reserves gradually deplete.
Gladstone Investment Corporation (GAIN)
Gladstone Investment is a business development company (BDC) that focuses on US-based small- and medium-sized companies. Industries which Gladstone Investment targets include aerospace & defense, oil & gas, machinery, electronics, and media & communications.Â
Gladstone Investment reported its second quarter (Q2 2025 ended September 30) earnings results in November. The company generated total investment income of $25.3 million during the quarter, which represented a 12% increase year-over-year. Gladstone Investment’s earnings-per-share totaled $0.24 during the fiscal second quarter, which was down from the previous quarter’s level.
Gladstone Investment‘s net asset value per share totaled $13.53 on a per-share basis at the end of the quarter, which was up compared to the NAV-per-share that the company reported at the end of the previous quarter.
Gladstone Investment’s net investment income per share can be a bit lumpy. During the Great Recession, the company’s profits declined substantially, but Gladstone Investment remained profitable. Over the last decade profits grew by around 3% annually, which is not a very high growth rate.
Gladstone Investment’s dividend payout ratio, relative to its net investment income, has been close to or above 100% throughout parts of the last decade. While the company did not cut its dividend in recent years, it has not offered dividend increases for a couple of years, either. Due to the elevated payout ratio, the dividend cannot be described as low-risk.
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