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.

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%.

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

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.


Material is prepared by

A trader since 2009, Max specialises in stock and currency markets. He is also a regular speaker in educational events about financial markets and investing.