10 Best Monthly Dividend Stocks to Invest In for Higher Gain

Investing in dividend-paying stocks has prolonged been an approach preferred by investors seeking a solid stream of earnings. While most dividend-paying businesses allocate earnings quarterly, monthly dividend stocks present a more regular payout plan. These investments provide consistent monthly income, helping investors establish a more predictable cash flow.

In this article, we’ll explore the concept of monthly dividend stocks, how they work, and why they can be a strong option for income-focused investors. We’ll also highlight 10 of the best monthly dividend stocks, their benefits, and key considerations before investing.

Key Takeaways

Monthly dividend stocks distribute income every month, providing consistent cash flow.

They are ideal for income-oriented investors, including retirees or those seeking regular payouts.

Many monthly dividend payers operate in sectors like real estate, energy, and business development.

It’s significant to evaluate dividend yield, payout history, and financial details before investing.

Monthly dividends can boost portfolio diversification and support smoother cash flow management.

Infographic explaining what monthly dividend stocks are, including their definition, key benefits, important notes, and main features. — Monthly Dividend Stocks: Definition, Benefits, Features & Key Insights

What Are Monthly Dividend Stocks

Monthly dividend stocks are securities of corporations that distribute dividend payments every month, instead of quarterly or annually. These stocks appeal to investors seeking regular income, as monthly distributions provide more predictable cash inflow.

Dividends correspond to a portion of a company’s earnings allocated to shareholders, frequently in the form of cash. For income-focused investors such as retirees or those looking to supplement their earnings monthly dividends can offer a reliable and steady income stream. Common sectors for these stocks include real estate, utilities, and business development companies (BDCs), which are known for stable revenue generation.

Important Note

Monthly dividend stocks may not continuously maintain their outgoings. While many of the stocks listed have strong histories of monthly distributions, dividends are not guaranteed. Companies can reduce or suspend dividends during financial downturns or if their business model shifts. Always confirm the payout percentage and cash flow wellbeing before investing.

Why Invest in Monthly Dividend Stocks

1. Consistent Income

The most apparent benefit is the steady revenue stream. Monthly payments can be especially beneficial for those who rely on their investments for ongoing expenses, including bill payments and budgeting.

2. More Frequent Reinvestment

Monthly payouts provide more opportunities to reinvest dividends, supporting strategies like dollar-cost averaging. This can help accelerate portfolio growth through compounding.

3. Portfolio Diversification

Adding monthly dividend stocks to your holdings diversifies income sources, especially if your current portfolio includes quarterly dividend or growth stocks that don’t pay dividends.

4. Tax Efficiency

Depending on your jurisdiction, dividend income may be taxed at a lower rate than ordinary income. This can make monthly dividend stocks a more tax-efficient way to generate cash flow.

5. Inflation Hedge

Consistent monthly income can help offset the effects of inflation, especially if dividends are gradually increased over time, preserving purchasing power.

Pro Tip

Use a DRIP (Dividend Reinvestment Plan) to composite improvements. Many brokers allow you to automatically reinvest your monthly dividends into additional shares of the same stock. This can boost compounding returns over time without manual intervention especially powerful when dealing with consistent monthly income.

Pros and Cons of Monthly Dividend Stocks

Pros	Cons
✔ Provides reliable monthly income	✘ High dividend yields may come with higher risk
✔ Enables more frequent compounding through reinvestment	✘ Stock price volatility can impact dividend sustainability
✔ Enhances income diversification within a portfolio	✘ Sensitive to interest rate changes
✔ Ideal for income-focused investors	✘ Dividends may be reduced during economic downturns

Real-World Example

Retirees relying on Realty Income (O) A retired couple I once consulted used Realty Income (O) to fund a portion of their monthly living expenses. Thanks to its reliable dividend track record and monthly payments, they were able to align their stock income with their utility bills reducing reliance on withdrawing from retirement accounts during market dips.

10 Best Monthly Dividend Stocks for Reliable Returns

Here are ten top-performing monthly dividend stocks that combine consistency with growth potential:

1. Realty Income (O)

Sector: Real Estate (REIT)
Dividend Yield: ~4.5%
Payout Frequency: Monthly

Recognized as “The Monthly Dividend Company,” Realty Income is a REIT that finances in commercial assets with long-term tenancies. It has a strong track record, increasing its dividend 114 times since going public.

2. STAG Industrial (STAG)

Sector: Real Estate (REIT)
Dividend Yield: ~4.6%
Payout Frequency: Monthly

STAG specializes in industrial properties such as warehouses and logistics centers key assets in the e-commerce boom. Its diverse tenant base supports reliable income generation.

3. Pembina Pipeline Corporation (PBA)

Sector: Energy
Dividend Yield: ~6.5%
Payout Frequency: Monthly

Pembina operates a comprehensive energy infrastructure network across North America. Its constant cash flows support reliable monthly dividends, creating it a dense selection for income investors.

4. LTC Properties (LTC)

Sector: Real Estate (Healthcare REIT)
Dividend Yield: ~6.3%
Payout Frequency: Monthly

LTC spends money in oldest housing and long-term care accommodations. As the senior population grows, LTC’s focus on healthcare real estate offers defensive income opportunities.

5. AGNC Investment Corp. (AGNC)

Sector: Real Estate (Mortgage REIT)
Dividend Yield: ~10.5%
Payout Frequency: Monthly

AGNC invests primarily in residential mortgage-backed securities. While offering high yields, it carries more risk due to interest rate sensitivity and housing market volatility.

6. Shaw Communications (SJR)

Sector: Telecommunications
Dividend Yield: ~4.4%
Payout Frequency: Monthly

Shaw, a Canadian telecom provider, offers internet, cable, and wireless services. Its reliable dividend history and firm processes make it attractive for revenue investors.

7. Main Street Capital (MAIN)

Sector: Financials (BDC)
Dividend Yield: ~6.3%
Payout Frequency: Monthly

Main Street Capital, a BDC, provides financing to mid-sized businesses. BDCs must distribute 90% of taxable income, supporting MAIN’s reliable dividend stream.

8. EPR Properties (EPR)

Sector: Real Estate (Specialty REIT)
Dividend Yield: ~7.5%
Payout Frequency: Monthly

EPR invests in experiential properties like movie theaters, amusement parks, and schools. Its niche focus and high yield make it attractive for income-driven portfolios.

9. Omega Healthcare Investors (OHI)

Sector: Real Estate (Healthcare REIT)
Dividend Yield: ~6.1%
Payout Frequency: Monthly

Omega concentrates on experienced nursing and helped living facilities. With long-term demographic tailwinds, it remains a strong choice for healthcare-focused dividend investors.

10. Broadmark Realty Capital (BRMK)

Sector: Real Estate (Mortgage REIT)
Dividend Yield: ~9.6%
Payout Frequency: Monthly

Broadmark provides short-term loans for real estate development. Its high yield is appealing, though investors should be aware of the elevated risk tied to construction lending.

Fast Fact

Only around 50 U.S.-listed companies pay dividends monthly. Monthly dividend-paying stocks are rare compared to quarterly payers. This limited pool often includes REITs, BDCs, and Canadian companies cross-listed on U.S. exchanges.

How to Select the Right Monthly Dividend Stocks

Here are key factors to evaluate when selecting monthly dividend stocks:

Dividend Yield
A high revenue can be appealing, but make sure it’s justifiable. Extremely high yields may signal financial instability or excessive risk.
Dividend History
Review the company’s track record. Reliable or growing dividends over many years designate financial power and assurance to shareholder revenues.
Financial Health
Strong fundamentals, including revenue consistency and positive cash flow, are essential for maintaining reliable dividend payments.
Sector Stability
Focus on sectors known for steady cash flow (e.g., utilities, real estate). Avoid excessively repeated industries that may cut payments during downturns.
Tax Treatment
Understand how dividends are taxed in your jurisdiction qualified dividends may receive favorable tax treatment compared to regular income.

Warning

High yields can signal trouble. If a stock offers a dividend yield far above its industry peers, it may be a red flag. This can indicate that the market expects a dividend cut or financial instability. Always dig into the company’s financials especially its free cash flow before assuming high yields equal high value.

Conclusion

Monthly dividend stocks are a respected tool for income-oriented financiers seeking steady, repeated cash flow. The 10 stocks listed above offer a strong mix of yield, consistency, and growth potential. However, always conduct due diligence to ensure alignment with your financial goals and risk tolerance.

Incorporating monthly dividend payers into your portfolio can increase diversification, improve cash flow predictability, and provide a reliable income stream that supports your long-term financial objectives whether for retirement, reinvestment, or supplemental income.

Frequently Asked Questions

Are monthly dividend stocks safe for long-term investing?

Monthly dividend stocks can be safe for long-term investing if chosen carefully. Concentrate on corporations with a robust balance sheet, constant free cash flow, and an established dividend track record. REITs like Realty Income and BDCs like Main Street Capital have delivered dependable payouts for decades. However, always diversify and avoid overexposure to high-yield stocks that may carry elevated risk.

Do I pay taxes every month on monthly dividend stocks?

Not necessarily. Taxes on dividends are generally paid annually when you file your tax return, not monthly. However, keep in mind that monthly dividends are still considered taxable income in the year you receive them. Consult with a tax professional to understand whether the dividends are qualified (taxed at a lower rate) or non-qualified (taxed at your ordinary income rate).

What’s better monthly or quarterly dividend stocks?

It depends on your investment goals. Monthly dividend stocks provide more frequent income, which is ideal for retirees or those seeking regular cash flow. Quarterly dividends may offer higher payouts per installment and a broader selection of companies. Many investors choose to hold both for diversification and cash flow smoothing.

Why do so few companies pay monthly dividends?

Monthly payouts require consistent and predictable cash flow, which not all businesses can maintain. Sectors like real estate, energy infrastructure, and finance (particularly REITs and BDCs) are structured to support frequent distributions. Additionally, many companies choose quarterly dividends because they align with standard financial reporting cycles.

Can I build a portfolio entirely from monthly dividend stocks?

Yes, but with caution. While it’s possible to build a portfolio solely from monthly dividend payers, it may limit sector diversification, as most of these companies are concentrated in REITs, BDCs, and utilities. A better strategy is to use monthly dividend stocks as a core income component within a broader portfolio that includes growth, defensive, and quarterly-paying stocks.