Investors often turn to dividend stocks as a reliable source of income, especially retirees looking for consistent cash flow. While most dividends are paid quarterly, some companies offer monthly payouts, which can be appealing for investors looking to better manage their finances.
One of the benefits of dividend stocks is the passive income they provide, with payouts automatically deposited into your brokerage account. Monthly dividend stocks offer the added joy of receiving these payments 12 times a year instead of the typical four.
Here are seven top monthly dividend stocks to consider, along with key characteristics to look for when searching for monthly dividend opportunities:
7 Best Monthly Dividend Stocks
We have curated a list of top monthly dividend stocks based on the following criteria (data as of Sept. 27, 2024):
- Traded on U.S. exchanges for easy accessibility
- Market capitalization exceeding $1 billion for financial stability
- Avoidance of business development companies (BDC) due to higher risk
Real estate investment trusts (REITs) are popular choices for monthly dividends due to their required dividend payouts and recurring revenue streams.
1. Realty Income (O)
Realty Income is known as “The Monthly Dividend Company” and owns single-unit commercial properties leased to high-quality tenants on long-term agreements.
- Market cap: $55.0 billion
- Yield: 5.1 percent
2. SL Green (SLG)
SL Green is New York City’s largest owner of office real estate, catering to the demand for office spaces in the city.
- Market cap: $4.6 billion
- Yield: 4.3 percent
3. STAG Industrial (STAG)
STAG Industrial focuses on industrial properties and warehouses, benefiting from the growth of e-commerce.
- Market cap: $7.3 billion
- Yield: 3.8 percent
4. AGNC Investment (AGNC)
AGNC Investment is a mortgage REIT specializing in agency-backed residential mortgages.
- Market cap: $8.2 billion
- Yield: 13.9 percent
5. Apple Hospitality REIT (APLE)
Apple Hospitality REIT operates hotels under various renowned brands, recovering from the impacts of the pandemic.
- Market cap: $3.7 billion
- Yield: 6.4 percent
6. EPR Properties (EPR)
EPR Properties focuses on experiential real estate, including movie theaters and cultural venues.
- Market cap: $3.7 billion
- Yield: 7.0 percent
7. Agree Realty (ADC)
Agree Realty owns properties leased to retail companies, offering a diversified portfolio of assets.
- Market cap: $7.6 billion
- Yield: 4.0 percent
Consider Closed-End Funds for Monthly Dividends
For investors seeking diversified monthly dividend options, closed-end funds (CEFs) can provide a mix of stocks and bonds, reducing risk through portfolio diversification.
CEFs may carry debt for investments, leading to increased volatility in turbulent markets, potentially impacting dividend payouts.
Investors are advised to buy CEFs below net asset value for added safety, although this does not guarantee protection from market fluctuations.
Key Factors for Dividend Investors
When evaluating monthly dividend stocks, focus on factors such as dividend sustainability, business model resilience, and recurring cash flows to ensure reliable payouts over time.
For sustainable dividend investments, consider exploring Dividend Aristocrats, companies with a proven track record of consistent returns.
Conclusion
While monthly dividends offer a consistent income stream, prioritizing dividend sustainability is crucial for long-term investment success. Focus on companies with a history of reliable payouts and potential for dividend growth.
Editorial Disclaimer: Investors should conduct independent research before making investment decisions. Past performance is not indicative of future results.