Category Monthly Dividend

Banks are scaling back their 2025 outlooks for U.S. stocks as uncertainty about the economy and markets escalates.

The benchmark S&P 500 could slump to 4,700, a further 7%-8% decline from Friday’s close, if President Donald Trump sticks with his tariff plans or the Federal Reserve doesn’t ease interest rates, Morgan Stanley analysts wrote.

The analysts said they had offered a 5,100-5,200 technical support level for the S&P 500 last Thursday but noted that “with the market quickly trading there on Friday and overnight futures down another 3-5% so far, our thoughts turn to the next area of support, which lies closer to the 200-week moving average, or 4700.”

Oppenheimer analysts on Monday cut their target to 5950, about a 17% premium to Friday’s close, from 7100. Read Investopedia’s live coverage of today’s trading here.

“The equity market appears oversold in our view,” Oppenheimer’s analysts wrote, “with uncertainty at levels investors find hard to embrace along with what we call ‘a negative pitch book’ that seemingly projects negative outcomes to infinity that’s taken hold in the near term of trader, investor, and consumer sentiment. 

The index closed at 5,074.08 Friday, having suffered the seventh-worst week in the last 25 years, a decline of more than 9%. S&P futures are down 2.7% early Monday.

“Valuations also offer better support at that price so investors should be prepared for another 7-8% potential downside from Friday’s close if there is no line of sight to a less severe trade environment and the Fed remains firmly on hold,” Morgan Stanley’s analysts wrote.

Trump so far has shown no signs of backing down from the tariffs, while Fed officials have elected to keep their key interest rate steady. Fed Chair Jerome Powell said Friday that Trump’s larger-than-expected tariffs could stoke inflation and slow economic growth. 

This article has been updated to add context and the new Oppenheimer estimate.

Goldman Sachs analysts told clients Sunday they are cutting their forecast for gross domestic product (GDP) growth in 2025, and raising their recession risk forecast in response to the Trump administration’s new tariffs.

The analysts now put a 45% chance on a recession coming in the next year, up from 35% previously, due to a “sharp tightening in financial conditions, foreign consumer boycotts, and a continued spike in policy uncertainty that is likely to depress capital spending by more than we had previously assumed.”

However, that 45% is predicated on the effective tariff rate rising by 15 points, less than it’s currently expected to rise if the Trump administration’s tariffs announced last week go into effect on Wednesday. If most or all of those tariffs are enacted and the effective tariff rate rises by roughly 20 points, the analysts said the likelihood of a recession could rise above 50%.

The Goldman analysts lowered their GDP growth forecasts to 0.5% for the fourth quarter and 1.3% for 2025, down from 1% and 1.5%, respectively.

The analysts said they now expect the Federal Reserve to make three consecutive quarter-point rate cuts starting in June, a month earlier than they previously expected cuts to start. In a recession, they expect about 2 points in total cuts over the next year.

Stock futures were down sharply Monday morning, extending last week’s tariff-fueled selloff after the stock market had one of its worst weeks in years. (Read Investopedia’s live coverage of today’s market action here.)

Global stocks are slumping Monday, extending their rout, as President Donald Trump’s sweeping reciprocal tariffs and China’s retaliatory duties sparked a flight into haven assets and raised fears of a U.S. recession.

The Stoxx Europe 600 index is about 6% lower, while Japan’s Nikkei closed down almost 8%, and Hong Kong’s Hang Seng, where the biggest Chinese companies are listed, cratered 13%. Meanwhile, U.S. stock futures are tumbling, with those associated with the Dow Jones Industrial Average down 1,300 points, or 3.6%, Nasdaq futures 3.7% lower, and S&P 500 futures down 4%.

The flight from risk is driving up bonds and sending the 10-year Treasury yield down to 3.95%. Wall Street’s “fear gauge,” the VIX index of implied stock market volatility, is surging to its highest levels since the early days of the pandemic, while oil prices—already dealing with the prospect of increased supply—are plunging, with West Texas Intermediate futures down 4% at around $59.

The sharp selloff comes as Trump doubled down on his tariffs Sunday night, saying, “I don’t want anything to go down, but sometimes you have to take medicine to fix something,” according to reports.

Goldman Sachs raised its odds of a U.S. recession to 45% in the next 12 months from 35%, “following a sharp tightening in financial conditions, foreign consumer boycotts, and a continued spike in policy uncertainty that is likely to depress capital spending by more than we had previously assumed.”

Updated on April 1st, 2025 by Felix Martinez

Extendicare (EXETF) has two appealing investment characteristics:

#1: It is a high-yield stock based on its 3.9% dividend yield.
Related: List of 5%+ yielding stocks.
#2: It pays dividends monthly instead of quarterly.
Related: List of monthly dividend stocks

You can download our full Excel spreadsheet of all 76 monthly dividend stocks (along with metrics that matter, like dividend yield and payout ratio) by clicking on the link below:

A high dividend yield and a monthly dividend make Extendicare appealing to income-oriented investors. The company is also ideally positioned to benefit from the secular growth of demand for healthcare services. In this article, we will discuss Extendicare’s prospects.

Business Overview

Through its subsidiaries, Extendicare provides care and services for seniors in Canada. The company offers long-term care (LTC) services; home health care services, such as nursing care, occupational, physical, and speech therapy, assistance with daily activities, and contract and consulting services to third parties. It operates LTC homes, retirement communities, and home healthcare operations under the Extendicare, ParaMed, Extendicare Assist, and SGP Partner Network brands. The company was incorporated in 1968 and is based in Markham, Canada.

Extendicare operates or provides contract services to a network of 103 long-term care homes and retirement communities, providing approximately 11 million hours of home health care services annually.

Source: Investor Presentation

Extendicare has been hurt by the coronavirus crisis, which has caused many problems in the company’s daily operations. COVID-19, influenza, and other viruses have resulted in abnormally high employee absenteeism, thus exacerbating an already tight labor market. As a result, Extendicare has seen its operating costs increase significantly since the onset of the coronavirus crisis.

Growth Prospects

Extendicare is ideally positioned to benefit from a strong secular trend, namely the growing demand for healthcare services. The demand for health care from seniors who are above 85 years old is growing at a 4% average annual rate.

Source: Investor Presentation

Moreover, there is an immense backlog of demand for long-term care beds, with more than 48,000 seniors waiting for a bed in Ontario alone. According to official estimates, there will be a need for more than 200,000 new long-term care beds in Canada by 2035. Thanks to its 55 years of experience in this business, Extendicare is ideally poised to benefit from the secular growth in the demand for health care services.

On the other hand, investors should be aware that Extendicare has exhibited a volatile performance record. Due to the aforementioned impact of the pandemic on its business, the company has not grown its earnings per share over the last decade. Therefore, the stock is suitable only for patient investors, who can endure extended periods of poor business performance and stock price volatility and remain focused in the long run. Given the low comparison base formed this year, we expect the company to grow its earnings per share by about 5.0% per year on average over the next five years.

Dividend & Valuation Analysis

Extendicare currently offers a 3.9% dividend yield. It is thus an interesting candidate for income-oriented investors, but the latter should be aware that the dividend may fluctuate significantly over time due to the fluctuation of the exchange rates between the Canadian dollar and the USD.

The company has a decent payout ratio of 68%. To cut a long story short, the 3.9% dividend will not likely be cut soon, but given the company’s material interest expense, it is not entirely safe in the long run.

Regarding the valuation, Extendicare is trading for 12.9 times its earnings per share in the last 12 months. We assume a fair price-to-earnings ratio of 10.0 for the stock. Therefore, the current earnings multiple is higher than our assumed fair price-to-earnings ratio. If the stock trades at its fair valuation level in five years, it will have a -2.2 % annualized compression for the next five years.

Taking into account the 5% annual growth of earnings per share, the 3.9% dividend, and a -3.5% annualized compression of valuation level, Extendicare could offer a 5.4% average annual total return over the next five years. This is certainly a fair expected return. Nevertheless, the stock is suitable only for patient investors who are comfortable with Extendicare’s volatile business performance and stock price.

Final Thoughts

Extendicare has a solid business model and greatly benefits from the growing demand for healthcare services. The stock offers an attractive dividend yield of 3.9% with a healthy payout ratio of 68%, making it an attractive candidate for income-oriented investors’ portfolios. The stock has an expected return of 5.4% per year over the next five years.

On the other hand, investors should be aware of the risk resulting from the company’s somewhat weak balance sheet and its choppy business performance. Therefore, the stock is suitable only for patient investors, who can ignore stock price volatility and remain focused in the long run.

Moreover, Extendicare is characterized by exceptionally low trading volume. This means that it is hard to establish or sell a large position in this stock.

Don’t miss the resources below for more monthly dividend stock investing research.

And see the resources below for more compelling investment ideas for dividend growth stocks and/or high-yield investment securities.

Updated on April 1st, 2025 by Felix Martinez

Investors seeking a dependable and consistent source of income may find it advantageous to invest in companies that distribute monthly dividends. This can significantly enhance predictability and reduce the uncertainty associated with investing in equities. Thus, monthly dividend stocks can be particularly useful during the highly volatile market environment.

That said, just 76 companies currently offer monthly dividend payments, which can severely limit an investor’s options. You can see all 76 monthly dividend-paying names here.

You can download our full Excel spreadsheet of all monthly dividend stocks (along with metrics that matter, like dividend yield and payout ratio) by clicking on the link below:

One name that we have not yet reviewed is First National Financial Corporation (FNLIF), a Canadian-based company in the financial services industry. Currently, the stock has a yield of almost 8%, which is many times that of the yield of the S&P 500 Index. Given that the company pays out dividends on a monthly basis, it may be a fitting pick for income-oriented investors.

This article will evaluate the company, its business model, and its distribution to determine whether First National Financial Corporation is a good candidate for purchase.

Business Overview

Over the last three decades, First National has grown to become a recognized and respected leader in real estate financing. As Canada’s biggest non-bank issuer of single-family residential mortgages, the company provides a comprehensive array of mortgage solutions tailored to suit each client’s unique requirements, lifestyle, and financial objectives.

Additionally, First National offers commercial mortgages, attributing its triumph to its team of experts who are among the most respected and renowned in the industry.

Source: Annual Report

Growth Prospects

To grow its revenues and earnings, First National can primarily rely on two factors – expanding its mortgage portfolio and increasing its interest income.

Assessing First National’s growth prospects is somewhat challenging these days due to the highly uncertain nature of the evolving interest rates. At first glance, the company’s revenues and income rose last year as it earned more on its existing mortgage portfolio.

That said, rising interest rates are generally not beneficial for mortgage issuers for a few reasons:

1. First, when interest rates rise, it becomes more expensive for potential buyers to take out mortgages, resulting in lower demand for mortgages. We saw this happening in the company’s 2022 results.
2. Second, First National could experience a decrease in profitability, as higher interest rates can also lead to higher borrowing costs for the company. This wasn’t the case last year, but it could be once the company has to refinance its own debt.
3. Third, as interest rates rise, some borrowers may find it difficult to make their mortgage payments, which can result in an increase in the number of defaults. This, in turn, can cause mortgage issuers to suffer losses as they may have to repossess and sell properties at a loss.

Therefore, despite last year’s improving results, it’s important to note that if interest rates remain high, the company’s profitability may not be as strong in the upcoming years.

Overall, the company’s earnings track record is quite volatile, which can be attributed to various factors that have the potential to impact its profitability depending on the prevailing macroeconomic conditions significantly. Still, First National’s earnings tend to trend upward over the long term.

Dividend Analysis

First National is currently yielding 7.8% and boasts a remarkable record of dividend payments. In fact, First National is a member of the S&P/TSX Canadian Dividend Aristocrats Index.

Although the dividend decreased by approximately 20% in 2010 due to the adverse impact of the Great Financial Crises on the real estate mortgage market, it has grown steadily every year from 2011 onward.

Specifically, the company’s dividend has grown at a compound annual growth rate of 6.4% over the past decade, mirroring its earnings-per-share growth over the same period.

Source: Investor Relations

Moving forward, we believe that First National may slow down the pace at which it grows its dividend. This is because the current payout ratio, at 65%, already appears relatively high, and profitability could decline in the coming years due to higher interest rates.

Therefore, the company is unlikely to take the risk of pushing the payout ratio to a level that could jeopardize its financial stability.

Final Thoughts

First National is likely to experience profitability headwinds in the coming years, especially if interest rates remain elevated. While higher interest income on its existing mortgage portfolio could somewhat offset the lack of new originations, the company’s own financial expenses are likely to pressure its bottom line.

That said, for investors seeking a steady stream of monthly income and an above-average yield, First National may be an attractive option. Despite operating in a challenging environment, the company has maintained a reasonable payout ratio and even slightly increased its dividend last year, indicating its commitment to rewarding its shareholders.

As such, income-oriented investors will likely find value in the stock despite any short-term financial setbacks due to higher interest rates.

Don’t miss the resources below for more monthly dividend stock investing research.

And see the resources below for more compelling investment ideas for dividend growth stocks and/or high-yield investment securities.

Published on April 1st, 2025 by Felix Martinez

Freehold Royalties (FRHLF) has two appealing investment characteristics:

#1: It is a high-yield stock based on its 8.4% dividend yield.
Related: List of 5%+ yielding stocks.
#2: It pays dividends monthly instead of quarterly.
Related: List of monthly dividend stocks

You can download our full Excel spreadsheet of all 76 monthly dividend stocks (along with metrics that matter, like dividend yield and payout ratio) by clicking on the link below:

Combining a high dividend yield and a monthly dividend renders Freehold Royalties appealing to income-oriented investors. In addition, the company is ideally positioned to benefit from high production growth in exceptionally rich resource areas in North America. In this article, we will discuss the prospects of Freehold Royalties.

Business Overview

Freehold Royalties is focused on acquiring and managing royalty interest in crude oil, natural gas, natural gas liquids, and potash properties in Western Canada and the United States. The company was founded in 1996 and is headquartered in Calgary, Canada.

Freehold Royalties aims to deliver growth and attractive risk-adjusted returns to its shareholders by acquiring high-quality assets with acceptable risk profiles and long economic lives. It then tries to generate highly profitable lease-out programs for the development of its properties.

Freehold Royalties generates approximately 93% of its revenues from oil and natural gas liquids and the remaining 7% from natural gas.

Source: Investor Presentation

Moreover, the company generates 55% of its revenue from its properties in Canada and the remaining 45% from its properties in the U.S.

As an oil and gas royalty company, it is only natural that Freehold Royalties has exhibited a highly volatile performance record. The royalties that its new customers are willing to pay are greatly affected by the prevailing oil and gas market conditions and the underlying prices of oil and gas.

In addition, the oil and gas production of its existing customers significantly varies from year to year, as it is dependent on the prevailing oil and gas prices. Thus, it is not surprising that Freehold Royalties has posted losses in three of the last ten years.

Growth Prospects

Freehold Royalties currently enjoys decent business momentum. The company has grown its production by 38% over the last four years to a new record level.

Such a high production growth rate is extremely rare in the oil and gas industry. To provide a perspective, most oil majors, such as Shell (SHEL) and BP (BP), have failed to grow their output over the last several years. This is a key difference between Freehold Royalties and most oil and gas producers.

On the other hand, Freehold Royalties is inevitably sensitive to the oil and gas industry cycles. This is clearly reflected in the company’s volatile performance record. During the last decade, Freehold Royalties has failed to grow its earnings per share. In addition, the company has posted losses in three of the last ten years and negligible profits in three of the last ten years.

Freehold Royalties currently enjoys decent business momentum, not only thanks to its high production growth but also thanks to the deep production cuts implemented by OPEC in an effort of the cartel to support the price of oil. The price of natural gas has remained depressed this year, primarily due to an abnormally warm winter, but oil prices have remained above average. As a result, Freehold Royalties is likely to post above-average profits this year.

Given the decent business momentum and the cyclical nature of the Freehold Royalties business, we expect approximately flat earnings per share in five years from now.

Source: Investor Presentation

Dividend & Valuation Analysis

Freehold Royalties is currently offering an exceptionally high dividend yield of 8.4%, which is seven times as much as the 1.2% yield of the S&P 500. The stock is thus an interesting candidate for income-oriented investors, but the latter should be aware that the dividend is not safe due to the cyclical nature of the oil and gas industry.

Freehold Royalties is paying a generous dividend, but its earnings have decreased significantly vs. the 10-year high earnings per share of $1.03 in 2022. As a result, the payout ratio has risen from 68% in 2022 to 90%. Such a payout ratio is unsustainable over the long run.

Given its dramatic cycles, management should be praised for its pristine balance sheet, which is paramount in the energy sector. On the other hand, due to the inevitable swings in oil and gas prices, Freehold Royalties’ dividend is far from safe. Notably, the company has cut its dividend in three of the last ten years.

In addition, U.S. investors should be aware that the dividend received from this stock depends on the exchange rate between the Canadian and U.S. dollar.

In reference to the valuation, Freehold Royalties has traded for 12.4 times its earnings per share in the last 12 months. We assume a fair price-to-earnings ratio of 10.0 for the stock. Therefore, the current earnings multiple is much higher than our assumed fair price-to-earnings ratio. If the stock trades at its fair valuation level in five years, it will incur a -5.9% annualized drag in its returns.

Taking into account the flat earnings per share, the 8.4% dividend yield and a -5.9% annualized contraction of valuation level, Freehold Royalties could offer just a 2.5% average annual total return over the next five years. This is a low expected total return and hence we recommend waiting for a significantly lower entry point in order to enhance the margin of safety and increase the expected return from this highly cyclical stock.

Final Thoughts

Freehold Royalties has much better prospects in growing its production and reserves than most of its peers and offers an above-average dividend yield of 8.4%. The company also has a rock-solid balance sheet, which is likely to entice some income-oriented investors.

However, the company’s performance record has been highly volatile due to its business cycles, and it seems almost fully valued right now. Therefore, investors should wait for a much more attractive entry point.

And see the resources below for more compelling investment ideas for dividend growth stocks and/or high-yield investment securities.

Updated on April 2nd, 2025 by Felix Martinez

International REITs could be valuable for investors interested in diversifying their portfolios. Many international Real Estate Investment Trusts (REITs) are based outside the U.S. and have quality business models and high dividend yields.

One example is Granite Real Estate Investment Trust (GRP.U) (GRT-UN.TO), a Canadian REIT. Granite has a proven business model and pays a 5.6% dividend yield, which is about four times the level of the S&P 500.

Granite also pays its dividends monthly, which is a more attractive dividend schedule than REITs, which pay quarterly dividends.

Granite is one of 76 stocks that pay monthly dividends. You can access the full database of monthly dividend stocks (along with important financial metrics such as price-to-earnings ratios and dividend yields) by clicking on the link below:

Granite is listed in Toronto and New York, but for this article, we’ll use the New York listing and US dollars.

This article will outline Granite’s business model and discuss its merits as a dividend stock.

Business Overview

Granite owns and manages predominantly industrial real estate properties in North America and Europe. It converted to a REIT on January 3, 2013, and has transformed into a leaner, more efficient trust, with higher-quality assets.

Source: Investor presentation

Over time, Granite has grown from a smaller, less valuable portfolio that was almost entirely dependent upon one tenant (Magna), to a diversified, much larger portfolio with significantly higher average property values. The trust has undergone a transformation in recent years to reach these goals, and it is clear that the effort has paid off.

The trust’s income-producing portfolio consists of Multi-Purpose, Logistics and Distribution Warehouses, and Special-Purpose facilities. It owns a total of 63.3 million square feet spread across 143 properties in Europe, Canada, and the U.S. Combined, these properties have a carrying value of about $8.9 billion.

Source: Investor presentation

Granite is present only in countries with little or no geopolitical risk and in properties and industries with strong long-term fundamentals. It is still heavily concentrated in the US and Canada, with a little more than two-thirds of its property’s square footage in North America.

Still, its international exposure provides a diversifying component to the trust’s results. Granite focuses on properties that support e-commerce development and are located strategically to support such businesses in the best markets.

Source: Investor presentation

Granite seeks out areas that have proximity to major cities and have favorable demographics, including significant infrastructure and available labor pools. In addition, it already owns modern properties, meaning capital expenditure needs are low, with tenants with high switching costs.

These characteristics mean that Granite chooses only the most favorable properties to own, with long-term tenants who have the best chance of thriving in various economic climates. Finally, it focuses on the enormous shift to e-commerce, focusing on food and pharmaceuticals.

Granite REIT reported strong Q4 and full-year 2024 results, with net operating income (NOI) rising to $121.2M (+$11.2M YoY). Same-property NOI grew 6.3%, while funds from operations (FFO) increased to $92.7M ($1.47/unit) from $81.2M ($1.27/unit). Adjusted FFO (AFFO) reached $78.8M ($1.25/unit), improving the payout ratio to 66%. Annual FFO and AFFO rose to $343.9M and $307.1M, respectively, reflecting higher lease income and contractual rent adjustments.

Granite expanded with a 12-year, 391K sq. ft. lease in Houston, expected to yield 7.5% by Q4 2026. Q4 saw 1.07M sq. ft. of new leases at a 14% rental spread. Occupancy stood at 94.9%, with a committed rate of 95%. The Trust repurchased 482.1K units under NCIB and issued $300M in senior debentures. Moody’s withdrew Granite’s credit ratings at the Trust’s request.

Sustainability and financing remained priorities, with $1.19B in Green Bond proceeds allocated to eco-projects. Investment properties increased to $9.4B, with $53M in fair value gains and $287.5M in FX-driven appreciation. Granite’s disciplined capital management and development pipeline position it for continued growth.

Growth Prospects

Granite’s outlook is positive from a fundamental perspective, with the trust in the midst of a transformation. Granite is in the final stages of its years-long transformation in which it is optimizing its cost of capital, leverage on the balance sheet, and reaching what it considers a saturation point in critical target markets.

In recent years, the trust has experienced significant transition, switching out its CEO, board, and leadership team. Today, the trust is focused on transforming its portfolio through the sale of non-core assets, enhancing its presence in the U.S., and making purchases in select European markets.

Granite appears to have achieved its growth goals earlier than expected, and as a result, we expect incremental investment to slow somewhat in the coming years. A development pipeline is still in progress, with some properties in Europe and North America. However, Granite’s transformative moves have largely been completed.

Granite’s growth outlook is favorable, given that it should continue to see higher rent prices and a larger investment book through acquisitions and development.

Dividend Analysis

Granite currently pays a monthly dividend of $0.28 per share in Canadian dollars, which equates to ~$0.19 monthly in US dollars.

On an annualized basis, the current regular dividend payment is $3.36 per share in Canadian currency. In U.S. dollars, this works out to roughly $2.28 per share. This equates to a 5.6% yield.

If U.S. investors own the stock, returns will be subject to currency risk as it is translated from Canadian dollars to U.S. dollars. The dividend to U.S. investors will depend in part upon prevailing exchange rates, which currently stand at $1 CAD = $0.70 USD. Another important consideration for investing in international stocks is withholding taxes.

Note: As a Canadian stock, a 15% dividend tax will be imposed on US investors investing in the company outside of a retirement account. See our guide on Canadian taxes for US investors here.

Granite’s 5.6% dividend yield is supported by underlying cash flow. Based on the adjusted FFO for 2025, Granite’s payout ratio is 67%. That is slightly below previous years and considered safe in the REIT universe.

We believe Granite will grow FFO in the coming years and reduce the payout ratio, so in conjunction with the current fair payout ratio, we see the distribution as safe.

Final Thoughts

Investors can receive high levels of income and diversification benefits by considering REITs based outside the United States. Granite REIT is a good example of an international REIT with a high-quality business model, and a fair dividend yield of 5.6%.

The trust has largely completed its transformation effort, which diversified its portfolio, reduced risk, and enhanced its earnings growth prospects. As the payout ratio has been reduced significantly, we see this as supportive of future dividend increases. As a result, Granite remains an attractive option for investors looking for monthly dividends and a 5%+ dividend yield.

Don’t miss the resources below for more monthly dividend stock investing research.

And see the resources below for more compelling investment ideas for dividend growth stocks and/or high-yield investment securities.

Itaú Unibanco’s strategy of trying to be everything to every consumer and business isn’t unusual in the world of banking. The major US banks have adopted a similar strategy over time, providing core banking services like deposits and loans, but also insurance products, equity investing, and a host of other products to help attract customers.

However, what sets Itaú Unibanco apart is its exposure to emerging economies rather than established ones in Europe or the US.

Indeed, Brazil’s economy has struggled for many years, and many of the other countries Itaú Unibanco operates in similar, if not worse, situations.

This is a primary concern for us regarding the company’s ability to grow because a bank’s business model requires broad economic growth for its own expansion. Without this growth, Itaú Unibanco will have a difficult time producing profit expansion.

On February 6th, 2025, Itaú Unibanco reported its fourth-quarter and full-year results for 2024. The company’s recurring managerial result reached R$10.9 billion, up 2.0% from the previous quarter, with a 22.1% return on equity.

The loan portfolio grew 6.3% overall and 5.8% in Brazil, driven by mortgage (+5.6%), vehicle financing (+1.8%), and credit card loans (+6.8%). Small and medium-sized business loans rose 8.1% due to foreign exchange effects and government-backed financing. Corporate lending increased 6.8%.

Higher lending and an improved liabilities margin led to a 3.7% rise in the financial margin with clients, while credit costs rose 4.8%. Nonperforming loans over 90 days (NPL 90) improved to 2.4%, with similar gains in short-term delinquency rates.

For 2024, the recurring managerial result grew 16.2% to R$41.4 billion, with a return on equity of 22.2%. Pre-tax income rose 19.7% to R$60.5 billion, while the loan portfolio expanded 15.5% overall and 14.3% in Brazil. Growth in lending, higher margins, and structured operations drove a 7.1% increase in financial margins with clients. The cost of credit fell 6.6%, saving R$2.4 billion. Commissions and fees grew 7.2%, while the insurance and pension segment rose 13.8%.

Non-interest expenses increased 6.8%, but core costs rose just 4.4%, below the 4.8% inflation rate. The efficiency ratio hit record lows at 39.5% overall and 37.7% in Brazil. Shareholder returns included R$18.0 billion in distributions—R$15.0 billion in dividends and R$3.0 billion in share buybacks—bringing the 2024 net payout ratio to 69.4%.

Source: Investor Presentation

Dividend Analysis

Itaú Unibanco takes a conservative approach to dividend payments. The bank pays dividends to shareholders based on its projected earnings and losses, with the goal of being able to continue to pay the dividend under various economic conditions.

On the plus side, the relatively low yield affords the bank better dividend coverage as the payout ratio is in the teens. We, therefore, do not see any risk of a negative change in the dividend policy today, but we are also cautious about future growth given the uncertain outlook for Brazil’s economy.

Source: Investor Presentation

Thus, we do not believe income investors should be interested in Itaú Unibanco stock due to its fairly low yield and the elevated geopolitical and macroeconomic risk factors.

Final Thoughts

We see a difficult road ahead for Itaú Unibanco. With low projected earnings growth under normalized conditions and a diminutive dividend yield, we don’t view this stock as attractive.

Furthermore, buying international stocks carries multiple unique risk factors, including geopolitical and currency risks. Itaú stock provides geographic diversification for investors particularly interested in investing outside the United States.

However, the risks seem to outweigh the potential rewards for this stock. Given all of the above factors, we recommend investors avoid Itaú Unibanco, despite its monthly dividends.

Don’t miss the resources below for more monthly dividend stock investing research.

And see the resources below for more compelling investment ideas for dividend growth stocks and/or high-yield investment securities.

Updated on April 2nd, 2025 by Felix Martinez

The Keg Royalties Income Fund (KRIUF) has two appealing investment characteristics:

#1: It is a high-yield stock based on its 8.4% dividend yield.
Related: List of 5%+ yielding stocks.
#2: It pays dividends monthly instead of quarterly.
Related: List of monthly dividend stocks

You can download our full Excel spreadsheet of all 76 monthly dividend stocks (along with metrics that matter, like dividend yield and payout ratio) by clicking on the link below:

The combination of a high dividend yield and a monthly dividend render The Keg Royalties Income Fund appealing to income-oriented investors.

But there’s more to the company than just these factors. Keep reading this article to learn more about The Keg Royalties Income Fund.

Business Overview

The Keg Royalties Income Fund is a limited-purpose fund that owns the Keg trademarks and related property purchased from Keg Restaurants Ltd (KRL). Keg Restaurants has built a premier steakhouse brand in Canada and an established presence in the United States.

The fund owns the rights to the brand and has granted KRL an exclusive license to use the Keg Rights in exchange for a monthly royalty payment equal to 4% of the gross sales of Keg restaurants.

In return for adding restaurants to the fund’s royalty pool, KRL receives the right to acquire units in the fund. KRL’s effective ownership of the fund has grown from 10.00% at the time of the IPO in 2002 to over 20% as of the end of 2024. Hence, the interests of the two entities are well-aligned.

The Keg Royalties Income Fund stands out as a “top-line” fund, with its revenue stemming predominantly from KRL’s restaurant sales and only minor operating and financing expenses curbing its net income. Additionally, the fund benefits from a secondary source of income.

This unique structure shields the fund from the fluctuating earnings and expenses associated with actually running the restaurants. As a result, the fund enjoys protection from inflation and a relatively predictable stream of royalties and interest, among other benefits.

Growth Prospects

Similar to other royalty funds of its type that we have analyzed, like the Boston Pizza Royalty Income Fund and the A&W Revenue Royalties Income Fund, the fund’s growth prospects and overall performance hinge on just two key factors. The first is the number of franchised restaurants in its royalty pool, while the second is the rate of growth in same-restaurant sales.

For context, at the start 0f 2004, the fund had 86 Keg restaurants in its royalty pool. By the end of 2007 and 2013, this number had grown to 95 and 102, respectively. Since then, activity in the royalty pool has been rather stagnant. At the end of 2020 and 2021, the fund had 106 restaurants in its pool, while by the end of 2023, it had added one more to its count of 105.

We expect very few annual additions to the fund’s royalty pool, as it appears the brand has reached peak scaling potential. In comparison to the Boston Pizza and A&W Royalty Funds, which primarily focus on fast-food brands and offer more significant growth potential, Keg’s high-end dining experience is more tailored to a smaller and more specialized demographic, resulting in a more contained expansion capability.

Source: Annual Report

Future price increases in line with inflation should slowly but gradually add to the fund’s royalty-eligible gross sales generated by KRL. Of course, foot traffic in the company’s restaurants and/or restaurant openings and closings could also sway results.

The Keg Royalties Income Fund reported a decrease in royalty income and Royalty Pool Sales for the year ended December 31, 2024, primarily due to an extra week of sales in 2023. Fourth-quarter Royalty Pool Sales were $188.2 million, down 7.1% from the prior year, while full-year sales declined by 3.0% to $719.5 million. Royalty income dropped 7.1% in Q4 to $7.5 million and 3.0% for the year to $28.8 million. Despite this, distributable cash increased to $2.97 million in Q4 and $14.17 million for the year, attributed to changes in non-cash working capital. The Fund maintained a strong financial position with $2.07 million in cash and a 94.2% payout ratio for the year.

Looking ahead, economic uncertainty remains a challenge due to high interest rates, inflation, and reduced consumer spending. The Keg Restaurants Ltd. (KRL) continues to prioritize maintaining high food quality and service standards while managing cost pressures. Despite a 1.8% decline in guest counts, KRL outperformed the broader full-service restaurant sector. Q4 operating profit for corporate restaurants rose to $12.9 million, and EBITDA grew to $10.4 million, reflecting strong cost management.

KRL’s strategic focus includes operational efficiency, guest retention, and brand strength, as reflected in a 1.1% increase in gift card sales. Forbes also ranked the company Canada’s best restaurant employer in 2025. KRL remains committed to delivering exceptional hospitality and sustaining its leadership in the premium steakhouse market.

Dividend Analysis

Aligned with the fund’s aim to distribute all its profits to unitholders, the payout ratio has consistently hovered around the 100% mark. In 2024, it stood at 59%, while in 2021, it was 121.5%. This was due to the fund’s decision to disburse extra cash that had been held back in 2020 due to the pandemic, which had resulted in a payout ratio of just 85.9% at the time. Still, management estimates that 99.78% of distributable cash has been distributed since its inception.

Investors should not expect distribution increases or “cuts,” but rather expect that each year’s total distributions per unit will vary based on the underlying gross sales of Keg-licensed restaurants.

We see limited distribution growth prospects moving forward, in line with our rationale regarding the fund’s overall growth. Apart from higher pricing over the years, we can see the fund generating more or less stagnant earnings and thus paying out rather stagnant distributions.

The current monthly distribution of C$0.09 translates to an annualized rate of C$1.08 (or US$0.78), implying a yield of 8.4%. This yield is rather substantial, but it also reflects investors’ expectations for limited dividend growth prospects.

It’s worth highlighting that the management’s approach appears to involve dividing the quarterly or yearly distributions into equal sums by forecasting the forthcoming cash flows, thereby creating a uniform distribution rate and ensuring consistency in payouts month after month.

Final Thoughts

The Keg Royalties Income Fund offers a hefty dividend yield, which makes it a compelling pick for income-oriented investors, along with the highly attractive frequency of its monthly payouts.

Its frictionless revenue model, which is directly tied to the restaurant’s gross sales in its royalty pool, offers protection from inflation and a dependable stream of profits, regardless of each individual restaurant’s profitability.

Provided that the Keg brand does not significantly change, we anticipate the company will continue to generate a stable stream of monthly distributions through reliable royalty and interest income.

However, compared to other trusts of this type we have analyzed, we anticipate that the scope for distribution growth is relatively restricted due to the paucity of new restaurant openings and the possible saturation of the brand.

Consequently, investors should prepare for the bulk of their returns to come from the dividend. Taking this into account, we believe the fund will not achieve annualized returns exceeding the mid-to-high single digits, which is in line with its current dividend yield.

Don’t miss the resources below for more monthly dividend stock investing research.

And see the resources below for more compelling investment ideas for dividend growth stocks and/or high-yield investment securities.

Published on April 1st, 2025 by Felix Martinez

Firm Capital Property Trust (FRMUF) has three appealing investment characteristics:

#1: It is a REIT so it has a favorable tax structure and pays out the majority of its earnings as dividends.
Related:  List of publicly traded REITs

#2: It is a high-yield stock based on its 9.1% dividend yield.
Related: List of 5%+ yielding stocks

#3: It pays dividends monthly instead of quarterly.
Related: List of monthly dividend stocks

You can download our full Excel spreadsheet of all 76 monthly dividend stocks (along with metrics that matter like dividend yield and payout ratio) by clicking on the link below:

Firm Capital Property Trust’s trifecta of favorable tax status as a REIT, a high dividend yield, and a monthly dividend make it appealing to individual investors.

But there’s more to the company than just these factors. Keep reading this article to learn more about Firm Capital Property Trust.

Business Overview

Firm Capital Property Trust is focused on creating long-term shareholder value through capital preservation and disciplined investing.

In partnership with management and industry leaders, the REIT co-owns a diversified property portfolio that includes multi-residential, industrial, net-lease convenience retail, and core service provider professional space.

Firm Capital Property Trust has a history of 37 years, with presence in the real estate markets of Canada and the U.S. As its management directly invests in some assets of the REIT, its interests are aligned with those of the shareholders.

Source: Investor Presentation

Firm Capital Mortgage Investment Corporation reported strong financial results for Q4 and full-year 2024. Net income for Q4 rose 9.9% to $9.16 million, while annual net income increased 3.1% to $35.23 million. Earnings per share for Q4 improved to $0.249 from $0.242, though annual EPS declined slightly to $0.966 from $0.991 in 2023.

The investment portfolio expanded by 9.3% to $653.8 million, with new funding reaching $329.0 million, up from $249.5 million in 2023. The portfolio now includes 285 investments, averaging $2.3 million each, with 15 exceeding $7.5 million. The impairment allowance rose to $29.6 million from $22.7 million, reflecting management’s conservative approach to risk assessment.

The Corporation continues to offer a Dividend Reinvestment Plan (DRIP) and Share Purchase Plan, allowing shareholders to reinvest dividends or purchase additional shares commission-free. In 2024, declared dividends totaled $35.22 million ($0.9920 per share), slightly higher than in 2023. The number of outstanding shares increased to 36.73 million from 34.49 million, as the company maintains steady growth and investor returns.

Growth Prospects

Firm Capital Property Trust aims to grow via strategic accretive acquisitions. It partners with strong industry leaders who retain property management and execute partial acquisitions.

Firm Capital Property Trust boasts a defensive business model thanks to its tenants’ high credit profiles. However, investors should be aware that this is a slow-growth REIT.

Source: Investor Presentation

Since its inception in 1988, Firm Capital Property Trust has grown its net asset value per unit by only 57%. In other words, the REIT has grown its average net asset value per unit by 1.3% per year since its inception.

It is important to note that the lackluster performance record has resulted partly from strengthening the USD vs. CAD. As the Canadian dollar has depreciated by about 18% over the last decade, it is evident that Firm Capital Property Trust has faced a strong currency headwind in its results over the last decade.

Moreover, central banks have raised interest rates aggressively in the last two years to cool the economy and restore inflation to their target range. Higher interest rates have increased Firm Capital Property Trust’s interest expense by 50% in the last two years.

As inflation seems to have finally moderated, central banks will likely reduce interest rates in the upcoming years.

Given Firm Capital Property Trust’s solid business model, lackluster performance record, and currency risk, we expect the REIT to grow its FFO per unit by about 2.0% per year on average over the next five years.

Dividend & Valuation Analysis

Firm Capital Property Trust currently offers an above-average dividend yield of 9.1%. It is an interesting candidate for income-oriented investors. Still, the latter should be aware that the dividend may fluctuate significantly over time due to the exchange rate fluctuation between the Canadian dollar and the USD.

Moreover, the REIT’s elevated payout ratio of 95% greatly reduces the dividend’s margin of safety.

As a result, investors should not expect meaningful dividend growth going forward. It is also important to note that the dividend has been frozen over the last three years. Overall, the dividend may be cut during an unforeseen downturn, such as a deep recession.

About the valuation, Firm Capital Property Trust has traded for 11.5 times its FFO per unit in the last 12 months. Given the REIT’s high debt load, we assume a fair price-to-FFO ratio of 10.0 for the stock.

The current FFO multiple is slightly lower than our assumed fair price-to-FFO ratio. If the stock trades at its fair valuation level in five years, it will enjoy a 1.6% annualized return gain.

Considering the 1% annual FFO-per-unit growth, the 9.1% dividend, and a 2% annualized compression of valuation level, Firm Capital Property Trust could offer an 8.1% average annual total return over the next five years.

This is not an attractive expected return, though we recommend waiting for a better entry point to enhance the margin of safety and expected return.

Moreover, the stock is suitable only for investors who are comfortable with the risk that comes from the trust’s high payout ratio and material debt load.

Final Thoughts

Firm Capital Property Trust has a solid business model thanks to its competent management and the alignment of interests between its management and its shareholders. Management invests in the REIT’s properties, which is a significant advantage for the shareholders.

Despite its high payout ratio, the stock offers an exceptionally high dividend yield of 9.1%, making it an attractive candidate for income-oriented investors’ portfolios.

On the other hand, investors should be aware of the risks related to the trust’s high payout ratio and leveraged balance sheet. If inflation surges again, then high interest rates will greatly burden the REIT through high interest expenses.

Additional Reading

Don’t miss the resources below for more monthly dividend stock investing research.

And see the resources below for more compelling investment ideas for dividend growth stocks and/or high-yield investment securities.