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Best Monthly Dividend Stocks

Updated: 55 minutes ago

In this article we're going to take a look at stocks that pay monthly dividends. These monthly dividend stocks are ones that I would recommend to anyone looking to add monthly dividend payments to their portfolios. Monthly dividend payers provide consistent income monthly instead of over the quarter or semiannually. Instead of receiving large payments once a quarter you can plan your budget around these monthly distributions. This makes them attractive to anyone looking to simplify their portfolio or budget during retirement. Let's take a look a some of the best monthly dividend stocks available.


Table of Contents

Why Choose Monthly Dividend Stocks?

What to Look for in Monthly Dividend Stocks?

Realty Income Stock

STAG Industrial

Land Stock

RIOCAN Stock

JEPI Stock

MAIN Stock


Interested in learning about Dividend Investing? Check out my Ultimate Dividend Investing Guide or my personal Dividend Investing Portfolio Updates!


Why choose monthly dividend stocks?

Monthly dividend stocks are stocks that pay dividends to shareholders on a monthly basis, rather than quarterly or annually. There are several benefits to investing in monthly dividend stocks, which can make them a good addition to an investment portfolio:


  • Regular income: Monthly dividends provide a regular stream of income for investors, which can be helpful for those who rely on their investments for cash flow or are living off of their dividends in retirement.

  • Consistent returns: Monthly dividends can provide more consistent returns than quarterly or annual dividends, since they are paid more frequently. This can help smooth out volatility in the stock price and provide a more predictable income stream.

  • Compounding: Monthly dividends can be reinvested more quickly, which can lead to faster compounding of returns. This means that the dividends earned from the stock can be used to buy more shares, which in turn will generate more dividends.

  • Tax efficiency: Some investors may prefer monthly dividends for tax purposes, as the smaller regular payments may be taxed at a lower rate than a large annual payment.

  • Diversification: Monthly dividends can add diversification to an investment portfolio, as they can provide a regular income stream that is not dependent on the performance of the stock market.


It's worth noting that monthly dividends stocks may have lower yield than quarterly or annual dividends stocks and may also have higher volatility due to the frequency of the dividends. However, for those investors seeking regular income, monthly dividend stocks can be a good addition to an investment portfolio.


What to look for in Monthly Dividend Paying stocks?

When choosing monthly dividend paying stocks, there are several factors to consider:

  1. Dividend Yield: The dividend yield is the annual dividend payment divided by the stock price. A higher yield is generally considered more attractive, but it's important to also consider the stock's payout ratio, which is the proportion of earnings paid out as dividends, to ensure that the dividend is sustainable.

  2. Dividend Growth: Look for stocks with a history of increasing dividends on a regular basis. This is a sign of a company's financial strength and its ability to maintain and increase its dividends in the future.

  3. Financial Strength: The company's financial metrics such as profit margin, return on equity, and debt-to-equity ratio are important to evaluate. Stocks of financially strong companies are more likely to maintain or increase their dividends in the future.

  4. Industry and Business Model: Consider the company's industry and business model, as some industries and business models are more stable and predictable than others. For example, utilities and consumer staples are known for having a stable and predictable cash flow, making them good candidates for monthly dividends.

  5. Valuation: Look for stocks that are trading at a reasonable price relative to their earnings, dividends, and growth prospects. This will help to ensure that you are getting a good value for your investment.

  6. Management and governance: Look for companies that have a good management and governance, as they are more likely to make sound decisions and act in the best interest of shareholders.

It's worth noting that dividend-paying stocks may be more volatile than non-dividend paying stocks and the dividend may be cut or suspended if the company faces financial difficulties. It's always important to conduct your own research and analysis and consult with a financial advisor before making any investment decisions.


Realty Income Stock ($O)

Realty Income Logo

The first stock on our list is Realty Income or "The Monthly Dividend Company" as it's also known. The Realty Income dividend has been paid for 630 consecutive months and been increased 101 consecutive quarters in a row. It's dividend has also grown at rate 4.4% (CAGR) annually during that time.

Realty Income's stock price has returned 14.4% since inception in 1994. Lastly, Realty Income has paid out $10.2 Billion over the last 53 years.






Realty Income Dividend Yield: 4.51%

Realty Income Dividend Monthly: $0.248

Realty Income Dividend Annual: $3.096

Income from $100,000 investment: $4,510

Realty Income Dividend History
Realty Income's Dividend Increases

Realty Income Corporation has a large list of clients from including grocery stores (10%), convenience stores (9%), dollar stores (7.7%), restaurants (11.9%) and more. Realty Income continues to expand into Europe to widen it's net on the market and further diversify.


Lastly, Realty Income Cooperation recently spun off its' offices into Orion Office REIT. If an monthly dividend stock that's in the Office REIT sector interests you, I would look into them as well.

DISCLOSURE: I am long $O in my taxable dividend investment portfolio


STAG Industrial ($STAG)

STAG Industrial stock is all about owning industrial properties. They are one of the only pure industrial REITs on the market and they capitalize on that perfectly. STAG boats a portfolio of 111 million square feet from 563 properties across 41 states. This all culminates in a portfolio valued around $8.7 Billion. STAG Industrial highlights their expertise:




STAG Industrial Dividend Yield: 4.44%

STAG Industrial Dividend Monthly: $0.12

STAG Industrial Dividend Annual: $1.46

Income from $100,000 investment: $4,440


"STAG Industrial, Inc. (NYSE: STAG) is a real estate investment trust focused on the acquisition, ownership and operation of industrial properties throughout the United States. For most of our properties (approximately 96%), tenants have entered triple-net leases, where they are responsible for all aspects of and costs related to the building and its operation during the lease term, including utilities, taxes, insurance and maintenance costs, but typically excluding roof and building structure. By targeting this type of property, STAG has developed an investment strategy that helps investors find a powerful balance of income plus growth."


The STAG industrial dividend has been increasing steadily for four years, which may not seem like long compared to Realty Income but I assure you STAG is a great monthly dividend payer. It's dividend growth is less than other peers but that is overshadowed by STAG Industrial's portfolio of properties. STAG pays roughly $0.12 per month or $1.46 annually.


STAG Industrial Incorporated is a great choice if you want to add monthly dividend stock from the Industrial REIT sector.



Gladstone Land ($LAND)

Gladstone Land Logo

Gladstone Land Corporation is a unique twist on the REIT because it is a A Farmland Real Estate Investment Trust. Gladstone Land stock owns farmland and farm-related facilities leased to high-quality farmers, primarily on a triple-net basis, meaning the farmer pays rent, insurance, maintenance, and taxes. They currently own 169 farms with over 115,000 total acres in 15 states and 45,000 acre-feet of banked water in California, valued at a total of approximately $1.6 billion. Their acreage is currently 100% leased.





LAND Dividend Yield: 2.74%

LAND Dividend Monthly: $0.05

LAND Dividend Annual: $0.60

Income from $100,000 investment: $2,740

Gladstone Land Investment Locations

Their primary focus is in annual fresh produce and permanent crops with a back up in grains and other crops. Here's a snapshot of their investments:

According to Gladstone, $LAND and farmland present a more stable investment opportunity with lower volatility.

$LAND Standard Deviation
$LAND Implied Standard Deviation

$LAND has produced a 110% total return since inception in 2013 which equates an annual total return of about 11%. The average annual return without reinvesting dividends is around 3.45% annually. That's on par to beat inflation, all while producing monthly passive dividend income.


What do you think? Are you going to add Gladstone Land to your portfolio?


RIOCAN Stock ($RIOCF)

Riocan stock logo

RioCan ($RIOCF) is one of Canada's largest real estate investment trusts, with a total enterprise value of approximately $13 billion as of September 30, 2022. Currently they own 198 properties or 35,000,000 square meters of leasable area worth around $13 billion.

RIOCAN investment locations




RIOCF Dividend Yield: 4.57%

RIOCF Dividend Monthly: $0.06

RIOCF Dividend Annual: $0.72

Income from $100,000 investment: $4,570


RIOCF's investment portfolio includes commercial committed occupancy and dedicated tenants across essential retail anchor tenants. This includes groceries, pharmacies, personal services, furniture stores, and other types of retailers. RIOCAN's overall stock price

RIOCAN tenant base

RIOCAN's overall stock price has not seen much capital appreciation over the last decade but is set up to grow as the market's recover in 2023 and beyond.


If your looking to branch out from US REITs but want to stay in North America then RIOCAN ($RIOCF) is the stock for you!


JEPI Stock ($JEPI)

JEPI Logo

It's no surprise that this income ETF made it on the list. I previously compared several Income ETFs here. JEPI or JP Morgan Equity Premium Income ETF is JP Morgan's income producing ETF that's goal is to capture some of the market returns while producing income. The ETF's inception was is 2020 but was offered by JP Morgan as a private investment tool prior to becoming a publicly traded asset. I saw this to reassure investors that this type of strategy has been around and tested for a long time. Some investors always ask "Is JEPI a good investment?"





JEPI Dividend Yield: 11.77%

JEPI Stock Dividend Monthly: $0.61*

JEPI Stock Dividend Annual: $7.32*

Income from $100,000 investment: $11,770*

*JEPI's monthly dividend is variable

JEPI Dividend History can be found here

JEPI's Investment Process
JEPI's Investment Process

$JEPI seeks to deliver monthly distributable income and equity market exposure with less volatility. JEPI's website describes it below:


EXPERTISE

  • Portfolio managers with over 60 years of combined experience investing in equities and equity derivatives.

PORTFOLIO

  • Defensive equity portfolio employs a time-tested, bottom-up fundamental research process with stock selection based on our proprietary risk-adjusted stock rankings.

  • Disciplined options overlay implements written out-of-the-money S&P 500 Index call options to generate distributable monthly income.

RESULTS

  • Provided an attractive 12-month rolling dividend yield of 9.64% and 30-day SEC yield of 12.51%.

  • Top quintile yield in the Derivative Income category.

  • Competitively priced vs. peers at 0.35%.

JEPI returns consistent income higher than most other assets including bonds, REITs, and High Yield stocks.

JEPI comparison

JEPI performed well when compared to the overall market in 2022 and proved that it can decrease volatility in a down market. For investors looking to add a income asset to their portfolio JEPI is the my #1 choice.

DISCLOSURE: I am long JEPI in my taxable dividend portfolio


MAIN Stock ($MAIN)

Main Street Capital Corporation (MAIN) is a publicly traded (NYSE: MAIN) business development company (BDC) that primarily provides capital to private U.S. companies; MAIN is located in Houston, Texas and has over $6.0 billion of investment capital under management.





MAIN Stock Dividend Yield: 7.01%

MAIN Stock Dividend Monthly: $0.225

MAIN Stock Dividend Annual: $2.70

Income from $100,000 investment: $7,010


MAIN Street Capital Stock pays a consistent cash dividend yield – dividends paid monthly.


• MAIN has never decreased its monthly dividend rate

• 105% increase in monthly dividends from $0.33 per share paid in Q4 2007 to declared dividends of $0.675 per share for Q1 2023

• Supplemental dividends, paid in addition to monthly dividends, from undistributed income of $0.35 per share in the last twelve months

MAIN Street Capital Dividend History

MAIN Street stock's focus falls into three areas:

  1. Sustain and Grow Dividends

  2. Meaningfully Grow Net Asset Value (NAV) Per Share

  3. Supplement Growth in DNII with Periodic Realized Gains

MAIN Street Capital

MAIN's portfolio consists of the following according to their Q3 2022 investor presentation:


75 portfolio companies / $1.9 billion in fair value

• 48% of total investment portfolio at fair value


Debt yielding 11.8%(1) (73% of LMM portfolio at cost)

• 99% of debt investments have first lien position

• 58% of debt investments earn fixed-rate interest

• Over 780 basis point net cash interest margin vs “matched” fixed interest rate on SBIC debentures and Notes Payable


Equity ownership in all LMM portfolio companies representing 41% average ownership position (27% of LMM portfolio at cost)

• Opportunity for fair value appreciation, cash dividend income and capital gains

• 68% of LMM companies(2) with direct equity investment are currently paying dividends

• Fair value appreciation of equity investments supports Net Asset Value per share growth

• Lower entry multiple valuations, lower cost basis • $317.3 million, or $4.17 per share, of cumulative pre-tax net unrealized appreciation at September 30, 2022


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We reviewed some of the best monthly dividends available. These dividend payers are ones I'd consider as safe. There are other monthly dividend payers on the market but aren't nearly as consistent with their payments. Remember, when choosing a dividend payer, you want to be careful to nit chase yield. It's also important to consider your time horizon for retirement because you don't want to lose out on capital appreciation simply for the yield.




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