In 2022, out of all the companies that traded their stocks on US exchanges, only 60 distributed dividends. We have selected the Top 10 companies with the highest dividend yield.
The list features ARMOUR Residential REIT, Inc., Orchid Island Capital, Inc., AGNC Investment Corp., Oxford Square Capital Corp., Ellington Residential Mortgage REIT, SLR Investment Corp., PennantPark Floating Rate Capital Ltd., Main Street Capital Corporation, Gladstone Investment Corporation, and Pembina Pipeline Corporation.
What dividends and REITs are
Dividends are a part or share of the company’s profit that the company divides between shareholders. The payment amount depends on the type and number of stocks held by an investor. The decision to pay dividends is made by the board of directors and the board of shareholders based on the company charter.
Dividends can be paid in cash, in stocks, or on the company’s property. Payments can be made monthly, quarterly, once every six months, or even less frequently. There are companies whose investors receive no dividends at all because not every company is a dividend-paying one.
REITs (real estate investment trusts) are funds that promise their investors no less than 90% of their earnings. By US law, this part of the profit is free from corporate taxes.
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1. ARMOUR Residential REIT – 20.7%
Founded in: 2008
Registered in: the US
Headquarters in: Vero Beach, Florida
Platform: NYSE
Market capitalisation: $758.4 million
The main business direction of ARMOUR Residential REIT, Inc. (NYSE: ARR) is investments in mortgage securities, especially state-sponsored bonds. Monthly dividends amounted to $0.1 per share, and profitability was 20.7%.
2. Orchid Island Capital – 17.8%
Founded in: 2010
Registered in: the US
Headquarters in: Vero Beach, Florida
Platform: NYSE
Market capitalisation: $354 million
Orchid Island Capital, Inc. (NYSE: ORC) is a REIT that invests in mortgage securities. In 2022, dividend payments fluctuated from $0.032 to $0.16. The dividend yield was 17.8%.
3. AGNC Investment – 14.8%
Founded in: 2008
Registered in: the US
Headquarters in: Bethesda, Maryland
Platform: NASDAQ
Market capitalisation: $5.4 billion
AGNC Investment Corp. (NASDAQ: AGNC) invests in mortgage bonds, which are guaranteed by institutions that are financed by the US government. Monthly dividends this year have reached $0.12 per share, and profitability amounted to 14.8%.
4. Oxford Square Capital – 13.7%
Founded in: 2003
Registered in: the US
Headquarters in: Greenwich, Connecticut
Platform: NASDAQ
Market capitalisation: $152.4 million
The main business of Oxford Square Capital Corp. (NASD: OXSQ) is investments in corporate debt securities and secured loans. In 2022, the company conducted monthly payments to its shareholders of $0.035 per share, and the dividend yield amounted to 13.7%.
5. Ellington Residential Mortgage REIT – 13.2%
Founded in: 2012
Registered in: the US
Headquarters in: Old Greenwich, Connecticut
Platform: NYSE
Market capitalisation: $94.9 million
Ellington Residential Mortgage REIT (NYSE: EARN) specialises in investments in dwelling mortgages and real estate. In the first 4 months of 2022, it paid out monthly dividends of $0.1 per share and $0.08 per share in the next months. The dividend yield amounted to 13.2%.
6. SLR Investment – 11.5%
Founded in: 2010
Registered in: the US
Headquarters in: New York, New York
Platform: NASDAQ
Market capitalisation: $786 million
SLR Investment Corp. (NASD: SLRC) provides business development services and invests in different sectors of the economy. In March, dividend payments reached $0.41 per share, while the other months recorded a dividend of $0.137 per share. Profitability reached 11.5%.
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7. PennantPark Floating Rate Capital – 10%
Founded in: 2015
Registered in: the US
Headquarters in: New York, New York
Platform: NYSE
Market capitalisation: $516 million
PennantPark Floating Rate Capital Ltd. (NYSE: PFLT) invests in small American and foreign public companies. This year, it paid out monthly dividends of $0.095 per share. The dividend yield amounted to 10%.
8. Main Street Capital – 7%
Founded in: 2007
Registered in: the US
Headquarters in: Houston, Texas
Platform: NYSE
Market capitalisation: $2.9 billion
Main Street Capital Corporation. (NYSE: MAIN) provides development services for medium and small businesses from such sectors as commercial services, car accessories, car transportation, goods for construction, consumer goods, energy, and technology.
From January to November, the company made 11 main dividend payments and 3 supplementary payments. The amounts varied from $0.075 to $0.215 per share, and the dividend yield amounted to 7%.
9. Gladstone Investment – 6.9%
Founded in: 2005
Registered in: the US
Headquarters in: McLane, Virginia
Platform: NASDAQ
Market capitalisation: $467.3 million
Gladstone Investment Corporation (NASDAQ: GAIN) refinances debts, loans, credit lines, and debt securities. It buys out controlling stakes of its portfolio companies, takes a place on the board of directors, and thereafter sells its share. Over 11 months of 2022, the corporation made 13 dividend payments ranging from $0.075 to $0.12 per share. The profitability amounted to 6.9%.
10. Pembina Pipeline – 5.4%
Founded in: 1954
Registered in: Canada
Headquarters in: Calgary, Canada
Platform: NYSE
Market capitalisation: $19.4 billion
Pembina Pipeline Corporation (NYSE: PBA) specialises in energy transportation services and buying and reselling liquid hydrocarbons, and natural gas. On average, the monthly dividends amounted to $0.155 per share, and the dividend yield was 5.4%.
Advantages and drawbacks of monthly dividend payments
Advantages:
- Passive income for the investor
- Opportunity to buy more stocks for extra money (reinvesting)
- Dividend payments increase alongside growing profit
- Companies that pay out dividends on a monthly basis look more stable for investors
Drawbacks:
- Dividend gap emerging from the decline of the quotes following the dividend payments
- Dividends are distributed from the company’s net profit, which potentially hinders business development
- Taxes on dividends are high in certain countries
- Monthly dividend payments are not guaranteed by the company and can be cancelled for financial reasons
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Summary
The Top 10 list of companies that have paid monthly dividends in 2022 includes ARMOUR Residential REIT, Inc., Orchid Island Capital, Inc., AGNC Investment Corp., Oxford Square Capital Corp., Ellington Residential Mortgage REIT, SLR Investment Corp., PennantPark Floating Rate Capital Ltd., Main Street Capital Corporation, Gladstone Investment Corporation, and Pembina Pipeline Corporation.
Some of them distributed dividends more frequently than once a month. By dividing the profit among their shareholders, companies increase their loyalty and trust levels, while investors receive passive income.
Investing with the goal of making a stable and regular dividend profit is a widely spread global practice. However, it should be remembered that dividend profits cannot compensate for a serious decline in the asset price.
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* – Past performance is not a reliable indicator of future results or future performance.
The material presented and the information contained herein is for information purposes only and in no way should be considered as the provision of investment advice for the purposes of Investment Firms Law 87(I)/2017 of the Republic of Cyprus or any other form of personal advice or recommendation, which relates to certain types of transactions with certain types of financial instruments.
