2 monthly dividend payers with amazing returns

Some companies pay annual or semi-annual dividends, which is common in European stocks. Quarterly dividends are the norm for American companies. However, some companies have monthly dividends, which some investors appreciate from the perspective of a regular income stream.

Bob Sciorra was selected for street These two dividend stocks have high yields, monthly payments, and a Zack’s Buy recommendation.

horizon

Horizon FinTech (HRZN) is a BDC (Business Development Company) that provides venture capital to small and medium-sized companies, primarily in the life sciences, technology, sustainability and healthcare IT sectors. Horizon’s specialized expertise knows how to find the best solutions in such risky sectors, which find it increasingly difficult to access the capital market.

The company posted returns of 16.3% over the past 12 months. Last Q2, total investment income rose 51.3% year-on-year, mainly due to growth in interest income. Net investment income per share (IIS) increased to $0.54, approximately 54% higher than in the second quarter of 2022. Net asset value (NAV) per share was $11.07, which was 2.4% lower than it was It is higher in the second quarter of 2022. The previous quarter and lower by 5.3% per year – on an annual basis.

After paying monthly dividends, Horizon’s undistributed earnings were $1.02 per share as of June 30, indicating a large cash pile. The future three monthly dividends are set at 0.11, which equates to a dividend yield of over 11%.

Gladstone Capital

Gladstone Capital (GLAD) is a business development firm currently valued at $350 million. Business development companies arrange financing for SMEs that do not have direct access to debt markets. Gladstone Capital primarily makes debt investments, which make up about 90% of its assets, but the company also holds small stakes in some of its portfolio companies.

As small companies funded by Gladstone Capital and other business development companies struggle to obtain financing elsewhere, business development companies generally generate above-average interest rates from their investments.

Gladstone reported its third-quarter earnings on July 26 and results were above expectations on both the bottom and top lines. Net investment income per share was 31 cents, four cents better than expected.

Total investment returns were $22.8 million, up 66% year over year, beating estimates by $1.15 million. The increase in investment income was due to higher interest income, which was attributable to increases in the weighted average return and the weighted average principal balance of the Company’s interest-earning investments.

The return on the company’s portfolio affects its ability to generate income and thus cover costs and distributions to shareholders. Over time, the company’s portfolio returns increased to more than 10%. Despite rising financing costs, Gladstone has been able to widen its yield spreads. Gladstone’s portfolio continues to grow in dollar terms, and higher spreads on a larger portfolio lead to earnings growth.

We believe the current dividend is sustainable; The latest increase is seen as a vote of confidence from management. Gladstone returns approximately 10% annually.

Read also: 3 Long Term Dividend Stocks

the IEX Editorial It consists of a team of content managers, journalists and analysts, with over a hundred years of experience in producing and disseminating investment information and opinions. The information in this column is not intended to provide professional investment advice or a recommendation to make specific investments. The editorial staff may hold positions in one or more of the funds mentioned.