Passive income is an integral part of a holistic investment portfolio, yet frequency issues tend to pop up with most equities, thereby incentivizing the bullish case for monthly dividend stocks. You see, most companies that offer dividends pay out on a quarterly basis. However, if you’re at least partially depending on this cash flow, your portfolio could get “lumpy” with traditional dividend payers.
On the other hand, monthly dividend stocks operate on the frequency of everyday life. For instance, your rent or mortgage statements are almost always charged on a monthly basis. So are your utility bills, telecommunication services, content streaming platforms and other recurring expenses. By having cash come in every 30 days or so, your bookkeeping can be smoothed out.
Further, there’s also the concept of faster compounding. With monthly dividend stocks, you can take the payouts and invest them into the same underlying or different equities. Further, by not having to wait every quarter, market participants can react to near-term developments.
Finally, many of the companies providing frequent payouts feature relevant businesses. Therefore, take advantage of these monthly dividend stocks to buy in August.
|MAIN||Main Street Capital||$44.85|
|ADC||Agree Realty Corp||$78.49|
|GWRS||Global Water Resources||$13.26|
|PVL||Permianville Royalty Trust||$3.39|
Stag Industrial (STAG)
Structured as a real-estate investment trust (REIT), Stag Industrial (NYSE:STAG) focuses on the acquisition and operation of industrial properties throughout the U.S. In total, Stag has a footprint that expands to 40 states, broken down into 551 buildings. Per its website, the company features an enterprise value of $9.9 billion.
Arguably the most compelling feature of Stag Industrial is that its properties are tied to the burgeoning e-commerce sector. During the catastrophe that was the coronavirus pandemic, multiple non-essential businesses were temporarily shut down. However, commerce kept moving forward thanks to online retail. Stag is one of the background players in the sector, providing an important cog in the wider supply chain network.
To be fair, the share of e-commerce sales relative to all retail sales has declined since its peak in the second quarter of 2020. Still, the industry itself commands great promise once the global economy eventually normalizes, making STAG an excellent idea among monthly dividend stocks.
LTC Properties (LTC)
Although the sudden rise in the equities sector following the spring doldrums of 2020 caught many folks by surprise, those who excessively ran with the optimistic wave are probably regretting it. Unfortunately, the capital markets are not linear-growth platforms. They ebb and flow like many other events in life, meaning that the exuberance had to be corrected.
However, with LTC Properties (NYSE:LTC), investors have on their hands one of the monthly dividend stocks that’s still playing in the early innings. As a specialist in the senior care and nursing industries, LTC Properties enjoys an incredibly powerful demographic catalyst: The massive number of baby boomers entering retirement age.
Up until 2019, baby boomers were the largest living adult demographic in the U.S. until they were overtaken by the millennials. However, with improvements in healthcare, baby boomers are retiring and living longer than ever. That’s going to likely lift LTC, making it one of the monthly dividend stocks to put on your must-watch list.
Main Street Capital (MAIN)
A little bit on the risky side, adventurous investors of monthly dividend stocks should take a look at Main Street Capital (NYSE:MAIN). A business development company (or BDC), Main Street provides debt and equity capital to middle-market firms. It’s an important function as many enterprises that require BDC services find themselves in an awkward position.
On one hand, they’re too big to qualify for certain programs geared toward small businesses. Further, the solutions available might not be adequate for the target company’s ambitions. On the other hand, many middle-market firms are not big enough to justify an initial public offering (or IPO). Therefore, a BDC like Main Street is the bridge between these two business phases.
A key advantage of investing in BDCs is that they usually pay sizable yields, which is the case for MAIN. As one of the monthly dividend stocks, the regularity of frequency helps significantly. However, they can be higher risk opportunities, particularly if interest rates spike too much.
Agree Realty Corp (ADC)
Featuring an investment portfolio of real estate leased out to some of the biggest names in the retail industry, Agree Realty Corp (NYSE:ADC) is among the monthly dividend stocks to consider buying and holding for the long haul. Admittedly, the current inflationary environment is a doozy of a headwind for both investors and households. Still, you must keep the bigger picture in mind.
With Agree Realty, the clients include the titans of industry. We’re talking names like Walmart (NYSE:WMT), CVS Health (NYSE:CVS) and Best Buy (NYSE:BBY), among many other immediately recognizable brands. So unless you envision that we’re entering an unprecedented depression, it’s reasonably safe to say that ADC will remain relevant for years to come.
As well, the company is more of an investment into retail as a sector rather than a specific retail company. With many ways for the economy to go, it’s desirable to navigate with a wide canvas, which is exactly what ADC provides.
Global Water Resources (GWRS)
While Global Water Resources (NASDAQ:GWRS) hasn’t had the best start to the first half of this year, the second half onward could be a different story. First, I think the technical profile of the water-resource management firm is significant.
Looking at its “lifetime” price chart, GWRS stock appears to be charting a series of higher lows. Therefore, the steep losses that it incurred since the late summer of last year could offer a long-term discount.
Fundamentally, the company is immensely relevant because anything related to water management is becoming extremely critical. Obviously, it’s one of the few precious resources that we can’t live without. Moreover, as the World Wildlife Fund stated, “some 1.1 billion people worldwide lack access to water, and a total of 2.7 billion find water scarce for at least one month of the year.”
Like the final services industry, Global Water Resources’ underlying narrative is inherently viable. Thus, it makes for a solid bet among monthly dividend stocks to buy.
Gladstone Land (LAND)
Speaking about relevant services, Gladstone Land (NASDAQ:LAND) is another enterprise to consider for inherently viable monthly dividend stocks. As a real-estate company focused on high-quality farms and farm-related properties, Gladstone Land is essentially tied to our national security. Even before the Covid-19 pandemic, Time reported that American farmers were in crisis, particularly with farm debt soaring.
Gladstone may be able to mitigate some of the pressure affecting the broader agricultural industry through its three-pronged business model. First, it offers long-term sale leaseback transactions, allowing farmers to improve their operations. Second, Gladstone rents out land to farmers with flexible lease terms. Third, the company also purchases land outright, finding new farmers (if needed) to operate the property.
Although Gladstone is extraordinarily relevant for our times, there are factors to consider. For one thing, LAND stock has been wild since the fourth quarter of 2021, with searing highs and lows. Also, it doesn’t offer the highest yield. Still, for the importance to our security, LAND is hard to beat.
Permianville Royalty Trust (PVL)
Ending this list of monthly dividend stocks is Permianville Royalty Trust (NYSE:PVL), arguably the riskiest name here. As per its name, Permianville is structured as a royalty trust, which is a special-purpose financing vehicle that allows investors to benefit from the income generated in energy-related ventures.
Essentially, companies like Permianville distribute monthly cash distributions based on royalties paid by those firms in the prior month. However, what you must keep in mind is that this business structure represents a pass-through entity, meaning that income and expenses are passed through to unitholders, with the expectation that unitholders will pay federal income taxes.
It’s a complicated affair, meaning that most folks will instead take a pass on the pass through. However, PVL is intriguing because like most other royalty trusts, it features a very generous dividend yield.
In this case, we’re talking about 8.1%. Combined with Permianville’s oil and natural gas business, at least some investors might be interested in taking another look at PVL.
Editor’s note: This article is regularly updated with the latest information.
On the date of publication, Josh Enomoto did not have (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.