Collecting reliable dividends is great, particularly if you’re going to use that income to pay your recurring bills.
The quarterly payout schedule that most dividend-paying companies have adopted, however, isn’t exactly ideal for this purpose. Utility bills, mortgage payments, and insurance premiums are just some of the living expenses that are incurred and paid on a monthly basis.
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The thing is, there are some dividend stocks that do dish out their distributions every month. They’re not exactly high-profile organizations, but lots of them boast strong payout histories. Here’s a closer look at three of them.
None of these are traditionally structured companies: Instead, they’re real estate investment trusts (REITs). That just means they own portfolios of rental real estate, and — vitally for income-focused investors — they’re obligated to pass along at least 90% of their taxable income to shareholders via dividends every year. As it turns out, the REIT business model is well suited to supporting consistent monthly dividend payments.
You may not be familiar with Realty Income (NYSE: O), but you’ve almost certainly set foot on at least one of its properties. This REIT owns on the order of 15,600 buildings in the U.S. and abroad that it rents to retailers and other consumer-facing companies. 7-Eleven, Dollar General, FedEx, and Walmart are among its biggest tenants.
Investing in anything connected to the brick-and-mortar retail space may feel scary these days. We’re in the midst of a retail apocalypse, after all. As industry research outfit Coresight reported, 7,325 storefronts were shuttered last year in the U.S. alone. Blame the continued growth of e-commerce, mostly.
There’s an important footnote to add to this data nugget though. That is, 5,970 stores were either opened or reopened in 2024. So while there’s no denying that in-person retail is on the defensive, conditions are clearly not all bad. The industrywide dynamic could be thought of as a thinning of the herd rather than an apocalypse. The chains left standing are and will be the top names — and those also include key tenants of Realty Income.
The REIT’s occupancy rate remains steady at 98.7%, and never dipped below 97.9% even during the early stages of the COVID-19 pandemic when huge numbers of retailers temporarily shuttered their stores. In a further testament to Realty Income’s consistency, not only has it paid dividends in each of the past 656 months, but it has raised its payout in each of the past 110 quarters at an inflation-beating annualized pace of 4.3%.
Those who buy shares now will be picking them up while the REIT’s forward dividend yield stands at 5.5%.
You likely won’t be surprised to hear that the average age of Americans is on the rise. Although Millennials are now the United States’ single-biggest generation, between them, the Baby Boomers and surviving members of the Silent Generation now number well over 70 million — the most seniors the nation has ever seen.
While many of them are still fully capable of living on their own, the realities of aging and the sheer size of this cohort means demand for nursing homes and assisted living facilities has never been greater — and that demand is expected to keep growing for the foreseeable future. A study from industry research outfit NIC MAP predicts that unless the pace at which the U.S. builds such facilities accelerates, by 2030, it will face a shortfall of more than 500,000 assisted living beds — equal to a $275 billion gap in investment in senior living facilities.
From there, things get dramatically worse. Absent a sustained faster push, by 2040, the country would be short $1 trillion worth of such facilities.
Enter LTC Properties (NYSE: LTC).
The REIT owns numerous senior housing, long-term care, and assisted living facilities, with 190 properties under its umbrella. It operates within the business in several different ways, though, including making loans forming joint ventures, as well as doing sale-leaseback transactions with such properties that make it more affordable for operators to enter the capital-intensive industry or just establish new facilities.
Admittedly, the business regularly is subject to the push and pull of political forces as the questions of who pays, how much, and for what services are hashed out by legislators. The REIT’s stock price has also underperformed the market since 2017. However, with its forward yield of 6.3% at the current share price and an ongoing demand surge that should persist regardless of how assisted living services are paid for, LTC is a monthly dividend payer worth considering.
Finally, add Stag Industrial (NYSE: STAG) to your list of monthly dividend stocks that just might belong in your portfolio.
Just as the name suggests, Stag owns properties used for industrial purposes. As of the end of last year, its portfolio consisted of 591 buildings covering a total of 116.6 million square feet. Most of them are warehouses and distribution facilities, although the REIT is exposed to a wide range of business. Its biggest tenant is Amazon, but the e-commerce giant accounts for less than 3% of its annual rent revenue. The Coca-Cola Company, Tempur Sealy, and American Time Distributors are a few of its other top renters. Like Realty Income, Stag’s tenant list includes plenty of high-caliber companies with staying power.
This relatively small REIT generated $767 million worth of rent revenue last year, and $193 million in net income — or funds from operations of $2.40 per share — that it could pass along to shareholders.
That’s largely what it did with those funds. In 2024, the REIT paid out a total of $1.48 per share, extending its decade-long stream of monthly dividend payments.
There are some downsides to this investment to consider before diving in, however. The biggest is that this REIT has raised its dividends by a paltry $0.01 per share annually since 2016. That degree of growth didn’t even keep up with inflation.
Take a step back and look at the bigger picture, though. Businesses of all shapes and sizes need the physical facilities that Stag can offer, and it is well run even if it’s not aggressively growing its footprint. Moreover, with a modest $2.5 billion worth of longer-term liabilities on its balance sheet and $483.5 million worth of liquidity ready to be tapped (versus a market cap of $7 billion), Stag Industrial has not only sidestepped the debt trouble many REITs have at times stumbled into, but has cash ready to deploy when the right opportunity arises.
So while Stag’s projected dividend yield of 4% may not be thrilling, its thoughtful approach to the purchase of land and the development of properties buoys the bullish argument for the stock, because these dividend payments are well protected.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. James Brumley has positions in Coca-Cola. The Motley Fool has positions in and recommends Amazon, FedEx, Realty Income, and Walmart. The Motley Fool recommends Stag Industrial. The Motley Fool has a disclosure policy.
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