3 Monthly Dividend Stocks With Safe Payouts

Monthly dividend stocks are highly appealing for income investors. That is because these particular dividend stocks pay their dividends every month, instead of once per quarter like most dividend-paying stocks.

However, investors must also evaluate stocks to make sure they have sustainable dividends. The following 3 stocks have safe monthly dividends.

Modiv Industrial (MDV)

Modiv Industrial (formerly known as Modiv) is Real Estate Investment Trust, which, as its name suggests, aims to pay Monthly Dividends to its shareholders. The company 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 42 properties that occupied 4.5 million square feet of aggregate leasable area. Prior to its public listing in 2022, the company Modiv was one of the largest non-listed REITs to raise funds entirely via crowdfunding and the first real estate crowdfunding platform to be entirely investor-owned. The company generated $46.9 million in revenues last year and is based in Costa Mesa, California. 

On August 6th, 2024, Modiv reported its Q2 results for the period ending June 30th, 2024. For the quarter, rental income came in at $11.3 million, down 4.2% 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 $11.4 million, down 4.2% from $11.9 million last year. AFFO was $3.9 million, or $0.34 per diluted share, versus AFFO of $3.3 million, or $0.31 per diluted share, in the prior year period. For FY2024, we expect AFFO per share to be close to $1.56 based on the company’s current leasing profile. 

Management has been primarily focused on acquiring industrial properties, but they’ve 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 has a projected dividend payout ratio of 74% for 2024. MDV stock currently yields 7.8%.

Whitestone REIT (WSR)

Whitestone is a retail REIT that owns about 55 properties with about 5.0 million square feet of gross leasable area primarily in top U.S. markets such as Texas and Arizona. Its tenant base is very diversified consisting of 1,453 tenants with no single tenant exceeding 2.1% of annualized base rental revenue. Its strategy is to prioritize renting to strong tenants and service-oriented businesses, including grocery, restaurant, health and fitness, financial services, logistics services, education, and entertainment, etc. in neighborhoods with high disposable income. 

Whitestone reported its first quarter 2024 results on May 1st, 2024, during which it witnessed an occupancy rate of 93.6% versus 92.7% in Q1 2023. For the quarter, revenue growth was 3.7% to $37.2 million versus Q1 2023. Funds from operations per share (“FFOPS”) dropped 4.2% to $0.23. Same-store net operating income (“SSNOI”) rose 3.1% to $23.9 million. Also, rental rate growth was 17.0%, down from 20.8% a year ago, supported by a jump in rental rate growth in new leases of 25.9% vs. 9.5% a year ago. 

Renewal leases growth was 15.0% versus 23.0% a year ago. There were 24 new leases and 46 renewal leases in the quarter. Whitestone maintained the following forecast for its 2024 guidance: SSNOI growth of 2.5%-4.0% and core FFOPS of $0.98-$1.04. It forecasts an ending occupancy of about 94.3%.

WSR should have the capacity to improve its dividend in the long run. For now, we use an estimated dividend growth rate of 6% through 2029, which would lead to a sustainable payout ratio of ~51% for a REIT. Whitestone’s exposure to the high growth Sun Belt market, as well as its investments in acquisitions, re-development, and development projects will drive future growth. 

The continuation of SSNOI growth since Q1 2021 is a good sign. We would like to see it stay that way. For now, we estimate a FFOPS growth rate of 5% through 2029 on a long-term recovery path.

WSR yields 3.7%.

Northland Power (NPIFF)

Northland Power is an independent power producer that develops, builds, owns, and operates green power projects in North America, Europe, Latin America, and Asia. The company produces electricity from renewable resources, such as wind, solar, or hydroelectric power, as well as clean-burning natural gas and biomass for sale under power purchase agreements and other revenue arrangements.

Northland Power owns or has an economic interest in approximately 3.2 gigawatts of generating capacity. The company was founded in 1987 and is headquartered in Toronto, Canada.

Northland Power greatly benefits from a strong secular trend, namely the shift of the entire world from fossil fuels to clean energy sources. This shift has greatly accelerated since the onset of the coronavirus crisis, about three years ago.

The tailwind from this secular trend is clearly reflected in the growth trajectory of Northland Power. The company has expanded from just one country in 2015 to six countries now. During this period, Northland Power has essentially tripled its generating capacity.

Northland Power has grown its earnings per share by 11.3% per year on average over the last decade. Given the exciting growth prospects of the company, but also the regular issuance of new shares and the increasing focus of many large players in this high-growth business, we expect Northland Power to grow its earnings per share by 8.0% per year on average over the next five years.

NPIFF currently yields 5.8%.