5 Best Monthly Dividend Stocks to Buy in September 2021

Dividend investing is among the most popular investing strategy, especially among conservative investors and those who rely on regular income from their investments. While most companies pay a dividend quarterly, some companies also pay monthly dividends. Here are the five best monthly dividend stocks that you can buy in September.

Here it is worth noting that, unlike coupons which are contractual payments, the dividends on common stocks are not fixed and is dependant on the management discretion. 2020 was a particularly bad year for dividend investors as many companies had lowered or suspended their dividends.

1. Gladstone Capital (NYSE: GLAD)

Gladstone Capital provides financing solutions to lower middle-market companies across the US. The company invests in companies that have revenues between $20-$150 million. GLAD invests in companies with a proven business model that generate positive EBITDA. It provides financing through senior term loans, revolving loans, mezzanine loans, and unitranche loans. It also takes a minority equity stake in companies at times.

GLAD is a monthly dividend-paying stock with a high dividend yield

GLAD stock tumbled last year as the COVID-19 pandemic took a toll on its business. The stock has since bounced back and is up 30% for the year. The company pays a monthly dividend and the current yield is 6.9%. If you are looking at a monthly dividend-paying stock in the financial industry, GLAD stock looks like a good bet.

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2. Horizon Technology Finance Corp. (NYSE: HRZN)

Staying within the financial industry only, HRZN is another stock that pays a monthly dividend. The stock has gained almost 25% this year and has a dividend yield of an impressive 7.3%. The yield would look even better considering the fact that the S&P 500’s dividend yield is near all-time lows while CDs don’t even yield 1% a year.

HRZN is a monthly dividend-paying company that invests in the tech sector

HRZN mainly lends to privately held development-stage technology companies that have the backing of reputed private equity companies. The company looks out for companies in the emerging industries, healthcare and life sciences, and sustainability companies. It also lends to publicly traded tech and life science companies.

Since the portfolio is tilted towards emerging industries, it is among the risky monthly dividend-paying stocks. However, the dividend looks attractive and is reflective of the higher risk associated with the company.

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3. Pembina Pipeline (NYSE: PBA)

Pembina Pipeline stock is up over 30% this year and has a dividend yield of 6.4%. The company is into energy transportation and midstream energy company that has been in the business for over six decades. Midstream energy companies typically pay healthy dividends and PBA is among those companies that pay monthly dividends.

PBA is a pipeline company paying monthly dividends

The earnings of midstream energy companies are usually much more stable than the volatile upstream energy sector where volatile energy prices tend to impact earnings. PBA has a strong balance sheet and expects to post an adjusted EBITDA between $3.3-$3.4 billion. The company had raised the lower end of the guidance during the second-quarter earnings call. “We continue to see considerable positive momentum in our business including a second quarter highlighted by exciting developments charting Pembina’s future path,” it had said in the release. The stock trades at an NTM (next-12 months) EV (enterprise value)-to-EBITDA multiple of 10.6x which is a discount over its average multiples over the last 10 years.

Wall Street analysts have a mixed opinion on PBA stock and it has 10 buys and eight hold ratings. None of the analyst has rated the stock as a sell. PBA stock has a median target price of $34.19 which is a premium of 9.3% while the street high target price of $37.99 is a premium of over 21%.

If you are looking at a monthly dividend-paying stock in the energy pipeline industry, PBA looks like a good bet.

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4. EPR Properties (NYSE: EPR)

EPR Properties is a diversified REIT (real estate investment trust). REITs are known to pay healthy dividends. Talking of EPR, not only does it have a healthy dividend yield of almost 6% but it also pays a monthly dividend. The stock is up a massive 61% in 2021. However, it still trades below its 2020 highs.

EPR stock’s valuations look reasonable and it trades at an NTM EV-to-EBITDA multiple of around 15x. The company has total investments of $6.4 billion and has over 200 tenants across 357 locations in North America.

EPR is a monthly dividend paying REIT

If you are looking at a monthly dividend paying REIT, EPR looks like a good bet. Despite the massive rise this year, Wall Street analysts see more upside in EPR stock and consensus estimates call for an upside of 8.2% from these levels. The street high target price of $62 is a premium of 24%.

Of the 11 analysts covering the stock, two have a buy rating while eight have a hold rating. One analyst has a sell rating on EPR stock. Meanwhile, EPR is also a play on the continued economic recovery and reopening. Along with capital gains, investors would also get rewarded with the fat monthly dividend.

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5. SL Green Realty Corp. (NYSE: SLG)

SLG is another monthly dividend paying REIT and has a current yield of just above 5%. The stock is up over 20% for the year and like EPR, trades below its pre-pandemic highs. The company is a play on the commercial real estate market in New York and is the largest owner of office real estate in the region.

SLG is a play on the New York commercial real estate market

SLG is a play on the New York commercial real estate market. Wall Street analysts are not very bullish on the stock though and it has only four buy ratings. 14 analysts rate this monthly dividend paying REIT as a hold while one analyst has a sell rating. The median target price of $77 is a 7.6% upside over the next 12 months.

The stock trades at an NTM EV-to-EBITDA multiple of 29x which is higher than the historical averages. That said, the multiples are higher due to near term downturn in earnings. The stock’s valuations would revert back to normalcy soon.

However, at current prices, SLG would appear a bit overvalued and it might be prudent to wait for prices to come down a bit before buying.

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