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What Dividend Stocks Pay Monthly?

Published in Monthly Dividend Stocks 4 mins read

For investors seeking a consistent stream of income, several dividend stocks offer monthly payouts, providing a more frequent return than the traditional quarterly distribution. These companies are often attractive for those looking to supplement their income or compound their investments more rapidly.

The Appeal of Monthly Dividends

Monthly dividend stocks provide a predictable and regular income stream, which can be particularly beneficial for retirees or individuals managing a budget. Unlike quarterly dividends, monthly payouts offer a smoother cash flow, making it easier to cover recurring expenses or reinvest dividends more frequently.

Leading Monthly Dividend Payers

A number of companies are known for their reliable monthly dividend payments. These often include Real Estate Investment Trusts (REITs), Business Development Companies (BDCs), and some utility or financial sector companies.

Here are some prominent examples of dividend stocks that pay monthly:

  • AGNC Investment Corp. (NASDAQ: AGNC): As a mortgage REIT (mREIT), AGNC invests primarily in agency residential mortgage-backed securities (RMBS). These securities are backed by the U.S. government, providing a degree of safety while aiming for high yields, making it a source of consistent monthly income.
  • EPR Properties (NYSE: EPR): This is a specialized REIT that invests in experiential real estate properties across the U.S. and Canada. Their portfolio includes entertainment venues, recreational facilities, and experiential lodging, benefiting from the growing demand for out-of-home experiences.
  • Realty Income Corp. (NYSE: O): Often referred to as "The Monthly Dividend Company," Realty Income is a well-known REIT that acquires and manages freestanding, single-tenant commercial properties. They lease these properties under long-term, net lease agreements, providing highly predictable rental income.
  • Main Street Capital (NYSE: MAIN): A Business Development Company (BDC), Main Street Capital provides capital to lower middle market companies. BDCs are legally required to distribute a significant portion of their earnings to shareholders, often leading to attractive dividends, including monthly payments.
  • Gladstone Commercial Corp. (NASDAQ: GOOD): Another REIT, Gladstone Commercial invests in and owns net-leased industrial and office properties across the U.S. Its focus on long-term leases with credit-worthy tenants supports its monthly dividend policy.
  • LTC Properties, Inc. (NYSE: LTC): This REIT primarily invests in senior housing and healthcare properties. LTC provides mortgage financing, joint ventures, and sale-leaseback transactions, aiming for stable income streams from a resilient sector.

A Comparative Look at Monthly Dividend Stocks

Company Name Ticker Industry/Sector Primary Focus Learn More
AGNC Investment AGNC Mortgage REIT Agency residential mortgage-backed securities (RMBS) AGNC Investor Relations
EPR Properties EPR Real Estate (Experiential REIT) Entertainment venues, recreational facilities, experiential lodging EPR Properties Investor Relations
Realty Income O Real Estate (Net Lease REIT) Single-tenant commercial properties under long-term net leases Realty Income Investor Relations
Main Street Capital MAIN Business Development Company (BDC) Debt and equity investments in lower middle market companies Main Street Capital Investor Relations
Gladstone Commercial GOOD Real Estate (Industrial/Office REIT) Industrial and office properties under net leases Gladstone Commercial Investor Relations
LTC Properties LTC Real Estate (Healthcare REIT) Senior housing and healthcare properties LTC Properties Investor Relations

Note: Dividend payments are not guaranteed and can change based on a company's financial performance and board decisions. Investors should conduct their own due diligence.

Considerations for Investing in Monthly Dividend Stocks

While the appeal of monthly dividends is strong, it's important to consider several factors before investing:

  • Yield vs. Sustainability: A high dividend yield can be enticing, but it's crucial to assess if the company's earnings can sustain those payments over time. Look at the dividend payout ratio and the company's historical dividend track record.
  • Company Fundamentals: Evaluate the underlying business, its industry position, financial health, and growth prospects. A strong balance sheet and consistent revenue are key indicators of a stable dividend.
  • Diversification: Relying too heavily on a few monthly dividend stocks, especially within the same sector (like REITs), can expose an investor to concentrated risks. Diversifying across different industries and asset classes remains essential.
  • Tax Implications: Dividends are taxable income. Understand how monthly dividends will affect your tax situation, especially if they are held in a taxable brokerage account.

Investing in monthly dividend stocks can be an effective strategy for generating regular income. By focusing on fundamentally sound companies with a history of consistent payouts, investors can build a portfolio that contributes to their financial goals.