Of all the different stock investment strategies you have at your disposal, dividend investing is one of the most compelling.
You earn consistent income through dividend payouts, and you also have the potential for capital appreciation if the stock price rises. These are seen as safe, steady investments, perfect for making a little extra cash on the side or navigating retirement planning.
We recently wrote about the monthly dividend stocks to hold forever, but what if you’re starting with a small account and want to find a better bang for your buck? You’ve come to the right place, as we’re going to highlight the best monthly dividend stocks under $5:
- MFS Intermediate High Income Fund (CIF)
- Banco Bradesco SA (BBD)
- Oxford Square Capital (OXSQ)
- PermRock Royalty Trust (PRT)
- San Juan Basin Royalty Trust (SJT)
- Prospect Capital Corp. (PSEC)
- U.S. Global Investors, Inc. (GROW)
- Itaú Unibanco Holding SA (ITUB)
- Permianville Royalty Trust (PVL)
- Extendicare, Inc (EXETF)
We’ll talk about the position of each company on this list below, dividend yield, history, and more. But no matter your stock picking strategy, it’s important to assess each opportunity individually through a tried-and-true approach to stock analysis.
That’s where VectorVest comes in, the #1 stock analysis software on the market. It takes complex technical indicators and transforms them into clear, actionable insights, delivering a buy, sell, or hold recommendation for any given stock at any given time.
So, read about the top 10 monthly dividend stocks under $5 below and set yourself up for investing success with the best stock analysis app today!
Overview of Dividend-Paying Stocks
Before we unveil the top 10 choices for monthly dividend-paying stocks under $5, what are dividend stocks? More importantly, are dividend stocks worth it?
These are some of the best stocks for beginners as they’re seen as low-risk investment opportunities. A dividend is a portion of a company’s profits being paid out to investors – and businesses only offer dividends when they have a strong financial foundation with ample profits to distribute.
This means you won’t deal with nearly as much stress and uncertainty as you would with other more volatile stocks, such as aggressive growth stocks. We talk more about the difference between dividend vs growth stocks in our blog.
One of the most common questions we get asked, though, is how often do dividend stocks pay. The industry standard is quarterly, however, some distribute dividends annually while others choose to do so monthly.
Monthly dividend stocks are particularly appealing for those in need of recurring income to cover present-day expenses. However, you need to be aware of both the pros AND cons of dividend stocks.
Not all dividend stocks are created equal, and the yield, stability, and sustainability of these dividends can vary widely between companies. It’s also worth noting that dividend stocks rarely offer much in the way of capital appreciation as these companies are at maturity and won’t grow much.
That being said, the compounding returns you can earn from reinvesting dividends may be able to outweigh other high-growth opportunities. This is especially true if you’re investing in the highest paying monthly dividend stocks.
Speaking of which, what are the best monthly dividend stocks under $5?
Top 10 Monthly Dividend Stocks Under $5
As we break down the top 10 monthly dividend stocks under $5, keep in mind that stock prices are constantly fluctuating. Some of these may climb above $5 depending on when you’re reading this, and we will work diligently to keep this list updated based on current market data.
We also encourage you to dig deeper into each stock using VectorVest, the best stock app for iPhone and the best stock app for Android alike. This way you’re timing your trades to perfection and making informed decisions to earn high returns and shield against losses.
MFS Intermediate High Income Fund (CIF)
This closed-end management investment company primarily invests in high-yield fixed-income securities to generate a high level of current income for its investors. The fund also seeks capital appreciation as a secondary objective.
It’s known for its consistent monthly dividends at a yield of approximately 9.5%, which translates to a solid income stream for its shareholders. The fund’s strategy of investing in high-yield bonds and maintaining a diversified portfolio of fixed-income securities supports its dividend payouts.
Just be aware this is not a high dividend stock at just $0.01 per share monthly. With a large enough position size, though, this can add up over the course of time.
Banco Bradesco SA (BBD)
Banco Bradesco is one of the largest banks in Brazil, offering a wide range of financial services including banking, insurance, and asset management. It plays a pivotal part in Brazil’s financial system, so you’re essentially investing in the financial health of an entire country.
The company did take a hit during the COVID-19 pandemic, and we do want to note that the stock itself has plummeted recently, down 35% through 2024 thus far. However, this could present a good opportunity to buy the stock at a discount if further analysis doesn’t raise any red flags.
From a dividend perspective, the yield of around 6% is solid, and the expectation is that the company will pay out a $0.04 yield in the coming month. It has been reliably paying dividends to shareholders since 1997.
Oxford Square Capital (OXSQ)
This business development company focuses its investments in debt and equity securities of technology-related companies. OXSQ aims to generate high current income and capital appreciation by investing in high-yield securities.
It’s an appealing choice to income-focused investors with a high monthly dividend yield of 10.5% backed by a consistent dividend payout history, which is attributed to its strong investment portfolio which is over $340 million.
The only troubling takeaway from our analysis of this monthly dividend stock under $5 is that its payouts have been shrinking over the past decade. Back in 2015 total dividends for the year came in at about $1.14 per share. But these have shrunk to just $0.42 annually.
Still, it is believed that these dividend cuts are being used to fuel business growth and address other areas of concern, encouraging long-term investors who are more worried about stability over returns.
PermRock Royalty Trust (PRT)
PermRock Royalty Trust is a statutory trust that holds a net profits interest in oil and natural gas properties located in the Permian Basin. The trust was formed to provide investors with monthly distributions based on the net profits generated from the properties.
It’s one of the most lucrative options we’ve discussed thus far with a dividend yield around 12%, with much of this being fueled by its oil profits. It generates 80% of the net profits from the sale of oil and natural gas produced in its properties, and these all go back to shareholders.
Given its stronger positioning than even many of the major oil companies, we consider this one of the best monthly dividend stocks under $5 you can add to your portfolio right now.
While it doesn’t have nearly as much dividend history as other companies (it only began paying dividends in 2018), its role in the oil and gas industry is a strong foundation.
San Juan Basin Royalty Trust (SJT)
Similar to PermRock Royalty Trust, San Juan Basin Royalty Trust owns an overriding royalty interest in oil and natural gas properties located in the San Juan Basin in New Mexico.
The trust’s primary objective is to distribute the net proceeds from the sale of oil and natural gas produced from its properties to its unitholders. The region in which it operates is known for having some of the richest deposits of oil and natural gas in our country.
Its dividend yield of just over 7% positions it ahead of many other companies on this list, with a total annual dividend of $0.27 – nothing crazy, but a steady source of income nonetheless.
Plus, the company has been paying out dividends for nearly three decades consistently without fail – making it a relatively safe monthly dividend stock under $5.
Prospect Capital Corp. (PSEC)
Prospect Capital Corp. is a business development company that primarily invests in private and public middle-market companies. In fact, it’s one of the most well-regarded BDCs on the market today with a whopping $2.7 billion market capitalization.
Prospect Capital focuses on direct lending to established companies in the form of senior and subordinated debt, often coupled with equity investments. It has an experienced management team steering the ship, making it one of the safest dividend stocks to add to your portfolio.
This stock boasts the highest yield yet at just under 13% with an impressive annual dividend of $0.72 per share. The company has more than 10 years of consistency to its name, too.
U.S. Global Investors, Inc. (GROW)
U.S. Global Investors, Inc. offers a range of mutual funds focusing on niche markets such as natural resources, emerging markets, and precious metals.
Although the dividends began back in the mid 2000s, the company itself has been around for more than 50 years, initially started as a club. Today, the publicly traded company has a market capitalization of $43 million and delivers annual revenue of around $22 million.
This investment management firm may not offer much in the way of dividend yield at just 3.5% coupled with a modest $0.09 annual dividend, but it has more than 14 years of consistency to its name.
Itaú Unibanco Holding SA (ITUB)
As a leading bank in Latin America, Itaú Unibanco Holding SA is similar to BBD in that you’re investing in a pivotal part of the country’s financial system. The company operates in Brazil along with the US, China, Japan, Switzerland, and Portugal among other countries.
The financial institution offers its customers a comprehensive range of financial products and services for individual and corporate clients alike. This allowed it to generate revenue of $33.34 billion in the most recent quarter.
ITUB has a solid yield of 8.4% and a 5-year expected return of as high as 16%. While the stock is technically just over $5 right now, it may not go much lower, making this an interesting time to consider buying the stock at a discount.
Permianville Royalty Trust (PVL)
Permianville Royalty Trust is very similar to PermRock Royalty Trust in that the company benefits from its properties in the highly lucrative Permian and Haynesville Basins, both of which are known for producing tons of oil and gas.
You should exercise caution with this stock (or any of these stocks, for that matter), given that it has plummeted in value over the past year and sits at just $1.10 today.
As a result, the company offers a low dividend yield of just over 3% and has yet to pay a dividend this year. However, PVL did have an impressive history of payouts up until 2024, tracing all the way back to 2011.
All things considered, if you’re looking to invest in monthly dividend stocks under $5 with an interest in oil and gas, you may be better off with PRT instead of PVL.
Extendicare, Inc (EXETF)
Finally on our list of the top 10 monthly dividend stocks under $5, we have Extendicare, Inc. – a Canadian company that provides care and services for seniors across Canada.
The company operates long-term care centers, retirement communities, and offers home healthcare services for the elderly, which as it turns out, is quite a lucrative business. In fact, the most recent quarterly earnings showed revenue of over $367 million with net income of $13.1 million – both of which are a 13% improvement YoY.
From a dividend standpoint, the company has paid out as much as $0.07 a month since 2013, but that figure has come down recently to just $0.04 per share. Its yield comes in at around 7.6%.
Wrapping Up Our Guide to the Best Monthly Dividend Stocks Under $5
There you have it, all the best monthly dividend stocks under $5 as of right now. Not all of these will align with your investment goals, and you should always use the best stock research sites for further analysis before making any moves.
Want to learn more about how to invest in dividend stocks? Explore our blog for resources like when to sell dividend stocks, how many dividend stocks should I own, best blue chip dividend stocks, how to build a stock portfolio, best stock indicators, blue chip investing, how to buy the dip, and more.
But whether you’re looking for the best dividend stocks 2024 or falling stocks to buy, current undervalued stocks, or anything in between, you need the best stock picker – VectorVest.
Our intuitive stock trading system has outperformed the S&P 500 index by 10x over the past 20 years and counting, all while saving investors time and stress in their approach to analysis and their decision-making.
It gives you all the insights you need to make calculated, emotionless investments in 3 simple ratings, and even goes as far as to deliver a buy, sell, or hold recommendation for any given stock at any given time.
Better yet, our stock advisory has pre-curated stock picks waiting to be discovered each and every day. You can find the best dividend stocks based on whatever criteria matters to you, or you can find other opportunities. The system aligns with any trading strategy.
So, why not find out firsthand what makes it the best investment apps for beginners and seasoned traders alike? You can get a free stock analysis today and see how simple and profitable trading can be with VectorVest!
Leave A Comment