3 Monthly Dividend Stocks to Buy and Hold for the Long-Term

Stocks to buy

The U.S. stock market saw a rise in dividend payouts during the year’s third quarter, according to an analysis by S&P Dow Jones Indices. The Q3 increase in dividend payments comes after a decline seen in this year’s second quarter and was led by a $2.1 billion increase to the dividend paid by tech giant Microsoft (NASDAQ:MSFT). The average dividend yield among companies listed on the benchmark S&P 500 index stood at 1.63% on the last trading day of September, according to S&P Dow Jones Indices. However, there are several companies that offer above average dividends to their stockholders and have recently raised their quarterly payouts. Here are three monthly dividend stocks to buy and hold for the long-term.

McDonald’s (MCD)

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In October, McDonald’s Corp. (NYSE:MCD) announced that it’s increasing its quarterly dividend payment by 10%. As of Dec. 15, stockholders of the quick service restaurant chain will receive a dividend payment of $1.67 per share each quarter, up from $1.52 previously. The higher payment gives McDonald’s a dividend yield of 2.51% based on the current share price. Over the last 10 years, the Golden Arches has more than doubled its annual dividend payment to $6.68 a share from $3.08.

McDonald’s paid its first dividend to shareholders in 1976 and has increased it every year since, making the company an elite “dividend aristocrat,” which is any organization that has raised its dividend payout for 25 consecutive years or longer. While the dividend is one reason to own MCD stock, the shares have proven to be a solid long-term investment, having gained 50% over five years and 175% over the past decade.

T-Mobile (TMUS)

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At the end of September, wireless internet provider T-Mobile (NASDAQ:TMUS) announced that it will issue a cash dividend to its shareholders for the very first time. The company declared a dividend of 65 cents per share, also payable to stockholders on Dec. 15 of this year. It is the first ever dividend payment by T-Mobile since the company was founded in 2001. The company has said that the dividend is payable to all shareholders of record on Dec. 1. The dividend has a current yield of 1.78%.

The inaugural dividend from T-Mobile comes after the company’s board of directors approved a new shareholder return program valued at $19 billion, and includes both share buybacks and dividend payments. T-Mobile’s current shareholder return program runs until Dec. 31, 2024 and consists of more than $15 billion of stock buybacks through the end of next year. However, T-Mobile’s board has said that it intends to pay $3 billion in dividends to stockholders during 2024. TMUS stock is up 5% year-to-date.

Dell Technologies (DELL)

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Last on the list of monthly dividend stocks for November is Dell Technologies (NYSE:DELL). In October, the personal computer maker made a big promise to its shareholders. The company founded and run by Michael Dell pledged to increase its dividend payment to stockholders by 10% a year between now and 2028. The company further promised to return at least 80% of its free cash flow to shareholders in the form of stock buybacks and dividends, up from a previous commitment to return 50% to 60% of free cash flow. Dell currently pays a quarterly dividend of 37 cents, giving it a yield of 2.15%.

The 10% increase over five years will take the company’s quarterly dividend payout well above 50 cents by 2028. Management said at their analyst day in New York City that the steady increase in the dividend payout is made possible by the fact that Dell expects its net income to convert to free cash flow at a rate of 100% or better moving forward. In addition to the dividend hike, Dell also increased its stock buyback program by $5 billion effective immediately. DELL stock has risen 68% this year and is up 170% over the last five years.

On the date of publication, Joel Baglole held a long position in MSFT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

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