How can you turn your portfolio into a cash-flow machine? One strategy is to hold shares of investment/financier companies (i.e., businesses that invest in other businesses) that pay decent dividends.
You can reinvest the cash distributions more frequently, leverage the compounding effect, and potentially grow your wealth even faster when the financier companies pay monthly dividends. Therefore, today I’m giving you five stock picks that pay dividends month after month.
All five stocks represent investment/financier companies that pay monthly and offer a forward annual dividend yield exceeding 10%. Just as importantly, these five businesses are transparent with their income statements, so you’ll be able to check their bottom-line financials with a modicum of due diligence.
PennantPark Floating Rate Capital (PFLT)
PennantPark Floating Rate Capital (NYSE:PFLT) primarily invests in “U.S. middle-market companies in the form of floating rate senior secured loans.” The company’s targeted market sectors for investment include professional services, leisure products, and electronic equipment, instruments, and components.
Turning to the company’s financials, PennantPark Floating Rate Capital reported investment income totaling $24.625 million in the second quarter of 2025. That’s up 16.1% year over year from $21.21 million in 2024’s second quarter, so it appears that PennantPark Floating Rate Capital is on the right track in this respect.
Notably, PennantPark Floating Rate Capital’s most recently paid monthly dividend was $0.103 per share. The company has consistently paid that amount every month for at least a year. PennantPark Floating Rate Capital’s forward annual dividend yield of 13% suggests that this company’s loyal shareholders will be richly rewarded, so PFLT stock looks like a worthy passive-income investment.
Stellus Capital Investment (SCM)
Stellus Capital Investment (NYSE:SCM) primarily invests in “private lower middle-market companies,” often through “first lien” loans. Targeted industries for investment run the gamut from hotel, gaming, and leisure to energy, oil, and gas as well as aerospace and defense.
For the three months ended June 30, 2025, Stellus Capital Investment’s net investment income was $9.6 million. That’s down 18.6% when compared to the $11.8 million reported for the three months ended June 30, 2024. It’s not a terrible result, but just something to be aware of.
The good news is that Stellus Capital Investment has consistently paid a per-share dividend of $0.133 per month for a long time. Since the company’s forward annual dividend yield is quite impressive at 11.59%, today might be a good day to start a position in SCM stock.
Ellington Financial (EFC)
Ellington Financial (NYSE:EFC) tends to focus its debt investments on residential and commercial mortgage loans and other mortgage-related asset types. However, the company may also delve into consumer loans, asset-backed securities, and other income-producing ventures.
Between its interest income and other income types, Ellington Financial net investment income reported Q2 2025 net income of $51.073 million. That’s down 15% versus $60.072 million from the year-earlier quarter; hence, investors ought to keep a close watch on Ellington Financial’s upcoming financial statements.
Passive-income seekers will be glad to know that Ellington Financial has been highly consistent in paying monthly distributions of $0.13 per share. That might not sound like much, but the company’s forward annual dividend yield of 11.95% should tempt you to add a few shares of EFC stock.
Dynex Capital (DX)
Dynex Capital (NYSE:DX) operates as a real estate investment trust (REIT) and specializes in financing residential real estate assets. Consequently, you probably won’t want to own DX stock shares unless you’re optimistic about the residential real estate market.
Checking in on the financial side of the equation, Dynex Capital’s data points aren’t ideal. As it turns out, the company’s net loss widened from $8.304 million in 2024’s second quarter to $13.606 million in the second quarter of 2025. This appears to be mainly due to interest expense losses along with losses on derivative instruments.
What’s encouraging, however, is that Dynex Capital hiked its monthly dividend payments from $0.15 to $0.17 during the past 12 months. Moreover, this company is a big yielder with a forward annual dividend yield of 16.86%. This is enticing, no doubt, but you’ll want to stay tuned for future financial updates if you’re interested in DX stock.
Horizon Technology Finance (HRZN)
Horizon Technology Finance (NASDAQ:HRZN) provides secured loans to a variety of businesses. The targeted industries for investment include life science, technology, healthcare information and services, and sustainability.
In terms of net investment income, Horizon Technology Finance’s results dipped 11.3% from $12.914 million in Q2 2024 to $11.449 million in Q2 2025. It’s not the end of the world for Horizon Technology Finance, but investors are still encouraged to monitor the company’s bottom-line financials.
There’s more to the story of this company, though. For at least the past year, Horizon Technology Finance has been absolutely consistent in paying $0.11 per share in monthly dividends. The company’s 20.79% forward annual dividend yield is a real head turner, so HRZN stock could be a worthy addition as long as you closely monitor the company’s financial results.
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