Top 3 Monthly Dividend Stocks January 2022

The sentiment to kick off 2022 is not what it was a year ago.

The era of free money is coming to an abrupt end. Inflation has reached a 40-year high, and bond yields are spiking, leading many pundits, analysts and investors to talk about a ‘super bubble’, with some expecting a correction in the region of 20%.

Also, thanks to both the 10-year and inflation-sensitive 2-year yields approaching 2-year highs, those high-flying tech stocks that everyone loved during the pandemic have continued their downward spiral.

With the Fed having no choice but to hike rates 3 potentially 4 times this year, a Fed policy that has “overstayed its welcome” could be coming to a stunning halt.  

Best Monthly Dividend Stocks January 2022

The good news is, there are strategies that you can employ to still chase upside potential while adding secure and constant monthly income streams without worrying about fixed-income yields.

That’s through quality, monthly dividend-paying stocks. As markets see-saw based on the latest headline, these consistent yields offer something that many previously high-flying stocks can no longer offer- consistency.  

So based on screening through financial research platform Finbox, here are our Top 3 monthly dividend-paying stocks based on yield and forward prospects. 

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Orchid Island Capital, Inc. (NYSE:ORC)

Often Real Estate Investment Trusts are the best monthly dividend payers, and Orchid Island Capital, Inc. is no exception.

This Florida-based specialty finance company invests in residential mortgage-backed securities (RMBS) throughout the U.S. and is backed by single-family residential mortgage loans.

Its portfolio includes traditional pass-through Agency RMBS, such as mortgage pass-through certificates and collateralized mortgage obligations, along with structured Agency RMBS, including interest-only securities, inverse interest-only securities, and principal-only securities. 

The company’s stock has not performed strongly year-to-date, but that’s not why we screened, right? As of Jan 18, 2022, Orchid Island Capital’s dividend yield was 16.1%, and its mean consensus yield for the next fiscal year was 18.98%.

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Permianville Royalty Trust (NYSE:PVL)

Permianville Royalty Trust is perfectly positioned for soaring oil and natural gas prices. It operates as a statutory trust and owns a net profits interest representing the right to receive 80% of the net profits from the sale of oil and natural gas production from properties located in Texas, Louisiana, and New Mexico. 

While much of the market has been sluggish to start the year off, PVL has gotten off to a strong start. If you’re betting on commodity prices to continue soaring, this is a good stock for you. The consistent monthly dividends, though, put the icing on the cake. 

As of Jan 18, 2022, Permianville Royalty Trust’s dividend yield was 13.2%. Finbox data also showed that Permianville Royalty Trust’s mean consensus forecasted dividends per share for the next fiscal year was $1.07. This is a phenomenal jump from its current $0.30 dividend and an eye-popping consensus forward yield of 47.14%.

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The Cushing MLP & Infrastructure Total Return Fund (NYSE:SRV)

The Cushing MLP & Infrastructure Total Return Fund is a stock perfectly positioned at the perfect time. Compared to the other two stocks on this list, its performance has been superb to kick off the year and has primarily moved vertically. 

It is a closed-end fund launched and managed by Swank Capital, LLC, perfectly set up to thrive during inflationary conditions. It invests in the public equity and fixed income markets across the globe, focusing on the United States.

Typically it invests in MLPs, Other Natural Resource Companies, and global commodities. It also invests in the securities of MLPs, other equity securities, debt securities, and securities of non-U.S. issuers employing a fundamental analysis.

While you can find companies with higher current dividend yields than its 4.3%, what was so attractive about this company was its forecasted yield for the next fiscal year. Finbox data shows its mean consensus dividend per share forecast for the next fiscal year is $5.2800, giving the stock a forward yield of 15.76%. This is obviously a massive jump from its current $1.44 dividend yield. 

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In Summary

These stocks are potentially very well positioned to align with rising interest rates and inflation, and look like delivering strong yields for investors when viewed against the current economic backdrop.

If you are investing for monthly income through 2022, then these stocks could make a welcome addition to your portfolio.

But remember, we’re not offering you investment advice. This is just our opinion, do with it what you will!

About the Author:

Robert Samuels has a Masters degree in Finance from Harvard University, having graduated with Dean’s List honors and a 3.87 GPA.

He is a prolific writer on all things real estate and financial markets, and has two graduate certificates in Real Estate Investment and Corporate Finance.