Investors continue to rely on the regular dividend payments they receive from the stocks they hold in their portfolios. And while most dividends are paid on a quarterly or semi-annual basis, some equities offer their stockholders monthly distributions. While not typical, monthly dividend payouts can be a great source of income for investors, particularly those living on a fixed income in retirement. Monthly payments are also a great way to build wealth and increase the value of a portfolio over time. Here is a look at three retirement stocks paying dividends monthly.
Main Street Capital (MAIN)
Main Street Capital (NYSE:MAIN) is one of the largest alternative lenders in the U.S. The company operates as a private equity firm, providing financing to small and midsize businesses that can’t secure funding from a traditional bank. The business model is not without risks. Many of the loans Main Street Capital makes are to businesses with less-than-perfect credit and assets. Still, Main Street Capital has a reputation for providing good returns to shareholders. And its monthly dividend is great.
Main Street Capital is designed to distribute 90% of its free cash flow to shareholders in the form of a dividend. The monthly dividend is currently 24 cents per share, giving it a yield of 7%. Additionally, Main Street Capital has raised its dividend every year for the last 12 years. The performance of MAIN stock isn’t too shabby either. Year-to-date, the company’s share price has increase nearly 10%. When combined with the dividend yield, Main Street Capital’s stock provides investors with a decent return on their capital.
Realty Income (O)
Realty Income (NYSE:O) is a real estate investment trust (REIT) that invests in commercial properties, mostly in the U.S. The company boasts over 236 million square feet of commercial retail space and reliable tenants such as Dollar General (NYSE:DG), 7-Eleven and Walgreens (NASDAQ:WBA) — to name only a few. REITs tend to offer the highest and most consistent dividend payments to investors, and Realty Income is no exception. The company has paid a monthly dividend for decades now.
Currently, Realty Income Corp. pays a monthly dividend to shareholders of 25 cents per share, giving it a yield of 6%. Over the course of a year, shareholders of O stock receive a dividend payment of $3 per share held. While the dividend payment is strong, shares of Realty Income have not performed as well. Year-to-date, O stock is down 20%. Over five years, the share price has declined 16%. However, investors who buy into Realty Income do so for the dividend payout.
Apple Hospitality REIT (APLE)
Apple Hospitality (NYSE:APLE) is another REIT that pays a strong monthly dividend. No relation to the iPhone maker, Apple Hospitality is a hotel REIT that owns over 220 properties with more than 28,000 rooms. Its tenants include major global hotel chains such as Marriott International (NASDAQ:MAR) and Hyatt Hotels (NYSE:H) — among others. Apple Hospitality tends to focus on an upscale market and high-end clientele, which has proven to be more resilient during economic downturns such as the COVID-19 pandemic.
As for its dividend, APLE stock pays a monthly distribution of 8 cents per share for a yield of 6.05%. The company had paid a dividend of 10 cents per share monthly following its 2015 stock market debut until COVID-19 travel restrictions put a dent in its earnings and cash flow. Apple Hospitality was forced to scale back its monthly dividend payment to 8 cents a share in 2022. However, the company promised to boost the monthly distribution once the hospitality sector firmly recovers from the pandemic.
On the date of publication, Joel Baglole did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.