Many investors flock toward dividend stocks for consistent cash flow. These investors enjoy receiving passive income without having to manage real estate properties or do a lot of work. All you have to do is monitor your holdings from time to time, and the companies take care of the rest.
You can get monthly dividend payments by diversifying your portfolio. Buying a bunch of dividend stocks that distribute dividends in January, February and March respectively can result in monthly payments throughout the year.
That’s because most companies that give out dividends in January also give out dividends in April, July, and October. Most companies that distribute dividends in February also give them out in May, August, and November. The companies giving out dividends in March often fill in the gaps.
However, what if you could remove this complexity and just buy stocks that give out dividends every month? Most of these companies exist in the real estate and lending sector. These are some of your choices.
Main Street Capital (MAIN)
Main Street Capital (NYSE:MAIN) has been issuing monthly dividends for a while and recently hiked its monthly dividend payment from $0.235 to $0.24 per share. Main Street Capital raised its dividend multiple times in 2023 and even offered two dividend payments in some months.
The company is slated to pay out a $0.235 dividend per share on December 7 and another $0.275 bonus dividend per share on December 19. The company has announced its dividends up to March 2024.
The stock currently has a 7% dividend yield. Even with that high yield, the share price has appreciated by 10% year-to-date. Shares are up by 6% over the past five years. For the most part, the stock trades like a high-yielding bond.
Main Street Capital lends money to various businesses and currently has 195 cumulative investments. The lender prioritizes lower middle market companies with annual revenue between $10 million and $150 million along with EBITDA between $3 million and $20 million.
That strategy seems to work for Main Street Capital based on its multiple dividend hikes and special dividends in 2023. Like all of the stocks on this list, Main Street Capital offers non-qualified dividends that will be taxed at ordinary income.
The ordinary income tax rate is higher than the capital gains tax rate for qualified dividends. It’s best to put these types of stocks into a Roth retirement account so you do not get taxed on dividend distributions.
Realty Income (O)
Just like Main Street Capital, Realty Income (NYSE:O) has also raised its dividend multiple times in 2023. The latest hike took the monthly dividend from $0.2555 per share to $0.256 per share. The company’s dividend yield is hovering near 6%.
Shares are down by 16% year-to-date and are down by 13% over the past five years. The dividend has minimized the year-to-date losses, but total gains are up over the past five years if you factor in the monthly dividend payments.
The firm has over 50 years of real estate investing experience and continues to pour money into promising assets. The company recently invested $2.0 billion in 289 properties that can yield 6.9% t through leases.
Many corporations turn to Realty Income for their leases. Wynn Resorts (NASDAQ:WYNN), Sainsbury’s (OTCMKTS:JSAIY), and 7-Eleven (OTCMKTS:SVNDY) are some of the big names that generate revenue for Realty Income. The company has also invested in numerous storage facilities.
Stag Industrial (STAG)
Stag Industrial (NYSE:STAG) specializes in warehouses and storage facilities. The stock has a dividend yield above 4% and raised its monthly dividend from $0.121667 to $0.1225 per share. STAG has gained 9% year-to-date and is up by 33% over the past five years.
Stag Industrial has 568 buildings spread across 41 states. The company’s properties consist of 112.0 million square feet. Many of Stag Industrial’s customers need the company’s facilities to store inventory and maintain smooth operations. That means plenty of cash flow from reliable clients.
Like many monthly dividend stocks, Stag Industrial isn’t the type of stock to outperform the market. However, it offers more stability than many picks. The company recently reported a 6.7% year-over-year increase in cash net operating income. Core funds from operations went up by 3.5% year-over-year.
Stag Industrial continues to acquire new buildings and reward shareholders with a monthly dividend and stock appreciation. Based on the company’s dividend schedule, Stag Industrial is poised to raise its dividend at the start of 2024.