7 Growth Stocks That Pack a Punch With Monthly Dividends
There are some substantial reasons to invest in growth stocks, They have the potential for higher returns because they usually represent expanding companies or are in growing industries. And they’re often at the forefront of new technology that, if successful, could bring about oversized returns.
In fact, for my money, the only thing that’s as good as a solid growth stock is a dividend stock. And dividend stocks are even better when they pay out every month rather than just once a quarter.
Dividends are incredibly valuable for investors because they represent opportunity and wealth. Dividends can be easily reinvested back into the stock by buying additional shares. That lets you build your portfolio even faster.
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Or, you can take the dividends as a reliable source of passive income.
I used the Portfolio Grader to look for outstanding monthly dividend stocks with solid growth potential. Some of these stocks do well on the Portfolio Grader, and others have higher marks on the Dividend Grader but all are well worth your time and attention.
Cross Timbers Royalty Trust (CRT)
Source: Shutterstock
Royalty trusts are popular choices for monthly dividend stocks. Royalty trusts own rights to specific assets, such as mineral rights, natural gas reserves, or intellectual property. It collects royalty payments from whoever is using – or in the case of mineral rights and gas reserves – collects them.
The trust then distributes royalty payments to shareholders through monthly dividends. And because the distributions aren’t considered to be taxable events, the monthly dividend yields are uncommonly high.
Cross Timbers Royalty Trust (NYSE:CRT) has the rights to gas properties in the San Juan Basin of New Mexico and oil interests in Texas and Oklahoma. CRT stock has been up 48% since mid-March and pays a 4.3% dividend yield.
CRT stock has a “B” rating from the Portfolio Grader and an “A” rating from the Dividend Grader.
Gladstone Land Corp. (GLAD)
Source: Maryna Pleshkun/Shutterstock.com
Gladstone Land Corp. (NYSE:GLAD) is structured as a business development company, which invests or provides capital to small- and mid-sized businesses.
Like royalty trusts, a business development company has to return 90% of its taxable income to shareholders, so companies like Gladstone make ideal monthly dividend stocks.
Gladstone invests in businesses through term loans and subordinated loans ranging from $7 million to $30 million. The company is structured as three investment companies – two of which are real estate investment trusts. At the end of the first quarter, its portfolio included 51 companies and 13 industries, with a value of $679 million.
GLAD stock is roughly flat for the year, but its monthly payout is generous, clocking in at a 10% dividend yield. That helps give GLAD a “B” rating in the Dividend Grader.
Main Street Capital (MAIN)
Source: Epic Cure / Shutterstock
Houston-based Main Street Capital (NYSE:MAIN) is a private equity firm that provides long-term debt and equity capital to lower middle market companies and debt capital to middle market companies.
It typically invests in companies with annual revenues between $10 million and $150 million, and its investments help companies complete management buyouts, recapitalizations, financing and refinancing, and acquisitions.
Main Street stock has been up and down all year, showing a 3% gain. But analyst firm B. Riley raised its price target for MAIN stock from $45 to $46, citing the company’s YTD performance.
But perhaps a better reason to consider MAIN is its 7% monthly dividend yield. That helps give MAIN a “B” rating in the Portfolio Grader.
PermRock Royalty Trust (PRT)
Source: Shutterstock
Another one on the royalty trust side is PermRock Royalty Trust (NYSE:PRT) which owns assets in the Permian Basin in Texas.
It receives 80% of the net profits from the sale and gas of oil and natural gas production from properties that Boaz Energy owns.
The oil and gas space has been profitable – oil prices are down from their 2022 highs but remain more than $70 per barrel. They’ll probably stay at that level as long as OPEC threatens to curb production.
PRT may be a problematic stock right now for some investors – the stock is down 33% this year. But if you’re looking for a dividend payout, it’s hard to pass up any stock with a 17% yield like PermRock.
PRT stock has an “A” rating in the Dividend Grader.
Sabine Royalty Trust (SBR)
Source: Ruslan Ivantsov / Shutterstock.com
Sabine Royalty Trust (NYSE:SBR) is a royalty trust that owns oil and gas rights in Florida, Louisiana, Mississippi, New Mexico, Oklahoma and Texas.
Like other royalty trusts on this list, Sabine rewards shareholders with an outsized dividend yield every month because its structure as a royalty trust requires it to pay out dividends as a non-taxable event.
SBR stock has been roughly flat over the last three months, but investors appreciate the 12.2% dividend yield. Sabine gets an “A” rating in the Dividend Grader.
Stellus Capital Investment (SCM)
Source: Vova Shevchuk / Shutterstock.com
Stellus Capital Investment (NYSE:SCM) is like Main Street Capital. It invests in private middle-market companies, usually roughly between $5 million and $50 million in annual earnings before interest, taxes, depreciation and amortization (EBITDA).
Its client list is diverse. Investments this year have included everything from an Italian cheese importer to a company that installs and maintains industrial refrigerators.
It has more than 80 current investments, with $2.9 billion of assets under management.
The stock performance has been up and down – currently, Stellus is showing a 2% gain on the year, and it’s been slowly climbing in June. The dividend yield is more glamorous, clocking in currently with a yield of 11.3%.
SCM stock has a “B” rating in the Portfolio Grader.
San Juan Basin Royalty Trust (SJT)
Source: Toasted Pictures / Shutterstock.com
Not surprisingly, based purely on the company’s name, San Juan Basin Royalty Trust (NYSE:SJT) owns oil and gas properties in the San Juan basin in New Mexico.
As oil and natural gas prices increase, so do San Juan’s profits. And while that’s fine for oil natural gas prices are down significantly in 2023. That explains the stock’s 37% drop in 2023.
But energy prices commonly go through hills and valleys, and it’s OK to buy into SJT, particularly when you know that you’ll benefit from rising gas prices down the road. In the meantime, you can take advantage of the crazy 27.5% dividend yield.
SJT stock has an “A” rating in the Dividend Grader.
On the date of publication, Louis Navellier had a long position in CRT, PBT and SBR. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier, who has been called “one of the most important money managers of our time,” has broken the silence in this shocking “tell all” video… exposing one of the most shocking events in our country’s history… and the one move every American needs to make today.
More From InvestorPlace
The post 7 Growth Stocks That Pack a Punch With Monthly Dividends appeared first on InvestorPlace.
