Monthly Dividend Stocks: 7 Picks For Steady Income

Make Money With Stocks That Pay Monthly Dividends

Today, I’d like to share several monthly dividend stocks with you.

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Because a steady stream of monthly dividends is one of the best assets that you can have.

Before retirement, reinvest those dividends. They will compound your wealth more rapidly.

Ready to stop working? Then use dividends to pay some or all of your expenses. Those dividends will come from your dividend retirement portfolio.

So let’s not delay.  Here is a list of monthly dividend stocks. Consider them for your dividend income portfolio.

And when you are done with this article, check out all of our dividend resources here at Dividends Diversify.

7 Monthly Dividend Stocks To Make Money From Dividends

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  • Realty Income (NYSE: O)
  • Stag Industrial (NYSE: STAG)
  • Main Street Capital (NYSE: MAIN)
  • Shaw Communications (NYSE: SJR)
  • Vanguard Total Bond Market ETF (NASDAQ: BND)
  • iShares Preferred and Income Securities ETF (NASDAQ: PFF)
  • Invesco S&P 500 High Dividend Low Volatility ETF (NYSEARCA: SPHD)

I plan to work through today’s topic about monthly dividend stocks in 2 steps.

1. First of all, we will do a brief review of each 1 of the 7 stocks that pay a monthly dividend.

2. Then discuss the pros and cons of companies that pay dividends monthly.  Also, why monthly dividend ETFs are a viable alternative.  For investors seeking steady dividend income from their dividend portfolio.

With those 2 steps in mind, here’s a little more background on each of these 7 monthly paying dividend stocks.

Disclosure: At no cost to you, I may get commissions for purchases made through links in this post.

Monthly Dividend Stock #1: Realty Income (O)

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What do I think of when it comes to the best money management practices of dividend stock companies? Well, Realty Income comes to my mind right away.

Realty Income is a REIT. This stands for “real estate investment trust”.  REIT status provides the company with favorable tax treatment.

In exchange for favorable tax treatment, these companies are required to pay dividends. They must payout at least 90% of their income to shareholders.

Realty Income is also known as “The Monthly Dividend Company”.  What better name for a company when discussing monthly dividend stocks?

Realty Income makes money through real estate ownership. Specifically, more than 6,500 commercial properties focused on retailers of consumer products and services.  These properties generate rental revenue from long-term net lease agreements.

Realty Income’s customer base is diversified. They have more than 600 commercial tenants.

Their tenants operate in 50+ industries. And are located throughout the U.S, Puerto Rico, and the United Kingdom.

Their properties are generally freestanding buildings. They are located in prime areas. And have good access and visibility.

You have likely been in one of their properties.  Since many of their tenants are recognizable names.  Some of those names include:

  • Walgreens pharmacies & retail outlets
  • 7-Eleven convenience stores
  • FedEx retail business centers
  • Dollar General discount stores
  • Big box store Walmart
  • Dollar Tree & Family Dollar

Realty Income’s Monthly Dividends

The company was founded in 1969. Since then it has made more than 600 consecutive monthly dividend payments.

Approximate dividend yield as of publication date: 4.8%

Also, Realty Income has reached the status of Dividend Aristocrat. Dividend Aristocrats are companies that have increased their annual dividends for at least 25 years in a row. Realty Income’s status as an Aristocrat makes it one of the safest monthly dividend stocks, in my opinion.

Let’s move on, but stick with real estate for our next stock that pays monthly dividends.

Dividends Every Month From #2: STAG Industrial (STAG)

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Stag Industrial, Inc. is also structured as a real estate investment trust.  The company focuses on the acquisition and operation of single-tenant, industrial business properties throughout the United States.

Stag makes money through ownership of nearly 500 industrial properties.  Similar to Realty Income, these properties generate rental revenue from long-term lease agreements.

Most of the company’s real estate portfolio is comprised of warehousing and distribution buildings. The majority of these facilities are located in the Midwestern and Eastern U.S. states.  And the company’s business has a large and growing exposure to e-commerce.

Single-tenant rentals carry business risk.  On the other hand, multi-tenant rentals reduce the risk of a single-tenant running into financial difficulty.

Stag mitigates this risk by performing detailed credit reviews of potential customers. They have a dedicated staff of analysts to do this work.  And currently, no customer is larger than 3% of Stag’s business.

Some of Stag’s large customers include:

  • Amazon
  • Solo Cup
  • XPO Logistic
  • Ford Motor Company
  • Packaging Corp of America

Stag’s Monthly Dividends

Stag started paying regular monthly dividends after its initial public offering in 2011.  And also is a company that increases its dividend regularly.  Making it one of the better stocks that pay monthly dividends.

Approximate dividend yield as of publication date: 4.5%

Next up, let’s move on to our 3rd monthly dividend-paying company.  Since we have REITs well covered, with the first 2 stocks that pay monthly dividends.  Number 3 operates in an entirely different industry. 

Monthly Dividend Stock #3: Main Street Capital (MAIN)

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Main Street Capital is a business development company (BDC).  So, what exactly is a business development company?

Here’s the deal:

A business development company is an organization that invests in small to mid-size businesses.  More often than not, these businesses are privately held and do not trade on the public stock exchanges.

So, BDC’s provide capital to businesses that have good investment potential.  They do so to fund start-up costs, growth initiatives, and recapitalization efforts.  BDC’s typically take an ownership equity position or provide debt financing.

Just like any other owner or lender, BDC’s make money on the financing provided.  For example, they sell stock positions for more than they paid, receive dividends, and collect interest on their loans.

BDCs operate like private equity firms.  But, in contrast to private equity, a BDC’s is a stock traded on a public exchange.  So this allows small investors, like you and I, to participate as stockholders.

That’s our lesson on BDCs for today. So, how does Main Street Capital go about its business?

Focus And Scope Of Main Street Capital

First of all, Main Street focuses on companies with revenues between $10 million and $150 million.  Also, cash flows of between $3 million and $20 million.  In this space, Main Street looks to provide secured debt.  And take a meaningful ownership position.

For larger companies, Main Street primarily provides debt securities.  These securities are typically senior to other lenders.  This means that in the event of a default, Main Street has priority in getting paid back.

Main Street has a diversified mix of portfolio companies and investments.  Most recently, they had nearly 200 portfolio companies.  That makeup over $2 billion of investment value.

Main Street’s Monthly Dividends

Since its October 2007 initial public offering, Main Street has periodically increased the amount of its regular monthly dividends paid per share.  Most importantly, the company and has never reduced its regular monthly stock dividend on a per-share basis.

Approximate dividend yield as of publication date: 8.3%

Like REITs, BDC’s are required to distribute at least 90% of their earnings in the form of dividend payments as a matter of policy.  When necessary to meet this requirement, the company declares semiannual supplemental dividends.

Sometimes the company suspends these special dividend payments.  But, the monthly regular dividends continue without interruption. So, as an investor, you receive dividends every month from Main Street Capital.

Let’s continue with our 4th monthly dividend stock.  This time we will move into the telecommunications industry.

Monthly Dividend Stock #4: Shaw Communications (SJR)

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Telecommunication firms have a nice track record of paying big dividends.  AT&T and Verizon come to mind in the U.S.  But these companies, pay dividends quarterly.

So, let’s cross the northern U.S. border.  There we will find Shaw Communications, a telecom company based in and serving Canada.  Shaw is another company that pays dividends monthly.

SJR provides broadband internet, wireless phone and data, landline phone, and cable TV service. The company provides services to commercial businesses and residential customers.

Shaw is not nearly as large as the big Canadian telecom providers.  Those companies are Rogers, BCE, and Telus. But Shaw is making an effort to become a fourth major player.

The company’s legacy landline phone business remains large.  It makes up more than 70% of total revenues.  Also, Shaw has expanded into wireless to keep up with our changing times.

To make the jump into wireless, they acquired Wind Mobile in 2016.  And have been working to upgrade their services in this area.  And doing so, while luring customers with aggressive pricing.

The investment required to transition to wireless has impacted the dividend.  How is that?

Shaw’s Monthly Dividends

Shaw has not increased its dividend since beginning its expansion into the wireless area.  Nevertheless, its current monthly dividend provides investors with steady cash flow from a relatively safe monthly dividend stock.

Approximate dividend yield as of publication date: 5.0%

Okay now, time to move forward.  Because that concludes our review of 4 companies that pay monthly dividends.

But wait, there’s much more. I’m going to round out our list of 7 stocks that pay monthly dividends with 3 monthly dividend ETFs.

I will explain why later in the article.  When we get into the advantages and disadvantages of companies for getting dividends monthly.

#5-Monthly Dividend ETF: Vanguard Total Bond Market (BND)

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Our first monthly dividend ETF is the Vanguard Total bond market exchange-traded fund.  Like the other 2 ETFs, we will talk about, BND tracks a stock market index.

The BND index is known as the Bloomberg Barclays U.S. Aggregate Float Adjusted Index. This index is also called the Agg. It is a broad-based, bond market index representing intermediate-term investment-grade bonds traded in the U.S.

The index includes government securities, mortgage-backed securities, asset-backed securities, and corporate securities. It seeks to simulate the universe of intermediate-term investment-grade bonds in the U.S. market.

Furthermore, the Agg consists of securities that have at least one year to maturity.  Finally, bonds in the index must have an outstanding par value of at least $100 million.

Here is what Vanguard has to say about BND…

The fund’s investment objective is to track the performance of a broad, market-weighted bond index. Specifically, BND:

  • Provides broad exposure to the taxable investment-grade U.S. bond market
  • Excludes inflation-protected bonds and tax-exempt bonds
  • Offers relatively high potential for reliable income
  • Limits portfolio volatility since the share price tends to rise and fall modestly
  • May be appropriate for medium to long-term financial goals
  • Is suitable for diversifying the risks of stocks in a portfolio

BND has nearly 10,000 individual bond holdings in its portfolio.  That’s right; you get thousands of bonds with one single purchase of BND.

BND’s Monthly Dividends

Finally, BND has been in operation since 2007.  And has paid dividends every month since its inception.

Approximate dividend yield as of publication date: 2.2%

Now, on to our next ETF paying monthly dividends.  It covers a completely different sector of the financial markets.

#6-Monthly Dividend ETF: iShares Preferred and Income Securities (PFF)

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First of all, iShares is an ETF line up from the investment company called BlackRock.  Furthermore, BlackRock’s PFF ETF primarily invests in preferred stocks.

Preferred stock is a hybrid security. It has a mix of bond and common stock characteristics. On one hand, the investor doesn’t have the upside potential like common stock.

On the other hand, you normally receive a hefty dividend yield that is higher than shares of the same company’s common stock.  Also, the holder receives preferential treatment above common stockholders on the receipt of those dividends.

Banks, insurance companies, utilities, and REITs are big issuers of preferred stock financing. But, preferred shares of issuing companies can be risky.

Their risk is partly due to a lack of liquidity.  Many are thinly traded each day in the stock market.

PFF’s Monthly Dividends

Furthermore, it’s rare for preferred stocks to pay dividends every month. So, it’s a good idea to invest in preferred stock through an ETF that pays monthly dividends. And this BlackRock ETF is a good one that pays monthly.

Approximate dividend yield as of publication date: 5.4%

Finally, here is what BlackRock says about its ETF:

Has broad exposure to U.S. preferred stocks.  Preferred stocks have characteristics of bonds, with a fixed dividend.  And stocks, representing ownership in a company.

PFF provides access to the domestic preferred stock market in a single fund. And, can be used to pursue income that can be competitive with high yield bonds. Paying monthly dividends with a robust stock dividend yield makes PFF a pick to consider for making money from dividends every month.

Next up, our last stock that pays monthly dividends.  It may be my favorite monthly dividend ETF.

#7-Monthly Dividend ETF: Invesco S&P 500 High Dividend Low Volatility ETF (SPHD)

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Finally, we have an ETF that seeks to track the S&P 500 Low Volatility High Dividend Index. The ETF carries the same name as the index and trades under the symbol SPHD.

The fund is composed of 50 stocks traded on the S&P 500 Index.  These stocks historically have provided high dividend yields and low volatility. A great combination to earn recurring dividends from stocks.

What do I like about this ETF?  Well, besides the fact it pays monthly dividends, there are several other points in the fund’s favor:

First of all, I like the size of the portfolio.  50 stocks are plenty for adequate diversification.  But not too many to overwhelm an investor wanting to understand where their money is invested.

Furthermore, the fund focuses on S&P 500 stocks.  Some of the best dividend-paying stocks can be selected from this popular and well known U.S. stock market index.

As I scan through the holdings, I see utility stocks like Duke, Southern, and Dominion.

Some good real estate investment trusts are held.  Including a position in Realty Income.

Health care stocks like AbbVie.  And sin stocks such as Philip Morris and Altria have positions in SPHD.

In my opinion, these stocks and other dividend stocks in the fund, make up a pretty nice monthly dividend ETF portfolio.

SPHD’s Monthly Dividends

Finally, SPHD holds many stocks that I own and cover here at Dividends Diversify. Most of the stock holdings pay dividends quarterly.

But SPHD puts all the stocks together into a dividend income portfolio. And that allows it to pay monthly dividends.

Approximate dividend yield as of publication date: 5.3%

That’s it on SPHD, our last of 7 monthly dividend stocks. But don’t go yet.

Before wrapping up, I want to share some of my favorite investing and money management resources. Then talk about some of the advantages and disadvantages of stocks that pay monthly dividends.

My Favorite Dividend Investing & Personal Finance Resources

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I use all of these services to make the most of my money. And get the best investment returns from dividend stocks.

Give 1 or more of these resources a try. You won’t be disappointed.

Now, on to the pros and cons of stocks from companies that pay monthly dividends.

Here’s the deal…

Advantages Of Monthly Dividend Stocks

Don’t be fooled. The most obvious advantage of monthly dividend stocks is… they pay dividends monthly.

Monthly dividends allow an investor to get their dividends more quickly.  There is no need to wait for semi-annual or quarterly dividend payments.

Let’s face it, our living expenses are due monthly.  So, having a monthly stream of dividend income is helpful when trying to use the money from dividends to pay bills.  Or, fund a dividend retirement portfolio.

On the other hand, maybe you don’t need your dividends for living expenses.  Then monthly dividends allow for faster reinvestment.  And therefore compound investment returns more quickly.

Disadvantages Of Companies That Pay Monthly Dividends

I wouldn’t simply invest in dividend stocks just because they pay a monthly dividend. Here are a few reasons why…

First of all, monthly dividend stocks tend to be clustered in relatively few stock market sectors.  Furthermore, there are only about 50 to choose from. Finally, companies that pay dividends monthly are often more speculative.

Many stocks that pay monthly dividends are issued by companies that have larger amounts of debt.  Excessive financial leverage in the form of debt can be a risk to a stock’s dividend safety.

The risk surfaces when a company encounters business or financial difficulties.  Because making debt repayments takes priority over paying dividends.

That doesn’t mean there aren’t safe monthly dividend stocks.  Realty Income comes to my mind immediately.  I have owned Realty Income for many years and never felt it to be speculative.  Or, that the dividend was at risk.

So, it’s important to do your stock research before investing in companies that pay monthly dividends.  Also, monthly dividend ETFs are a good way to reduce the risk of individual securities.

The risks of monthly dividend stocks are the reason I covered ETFs in the article today.  Specifically, BND, PFF, and SPHD. They represent quality ETFs paying monthly dividends.

That’s all for today.  Let’s wrap up with a summary of what we have covered.

7 Monthly Dividend Stocks For Regular Income

When learning to build a dividend income portfolio, consider stocks that pay dividends monthly.  Get your cash quicker and compound your returns with reinvestment.  Or, use the money from dividends to pay some or all of your monthly living expenses.

Here are 7 monthly dividend stocks to consider.  The list consists of 4 stocks paying monthly dividends.  Also, 3 monthly dividend ETFs.

  • Realty Income (NYSE: O)
  • Stag Industrial (NYSE: STAG)
  • Main Street Capital (NYSE: MAIN)
  • Shaw Communications (NYSE: SJR)
  • Vanguard Total Bond Market ETF (NASDAQ: BND)
  • iShares Preferred and Income Securities ETF (NASDAQ: PFF)
  • Invesco S&P 500 High Dividend Low Volatility ETF (NYSEARCA: SPHD)

Be sure to integrate 1 or more of these stocks into your investment portfolio for monthly dividends.

More Reading On How To Make Money From Dividends

Author Bio: Tom Scott founded the consulting and coaching firm Dividends Diversify, LLC. He leverages his expertise and decades of experience in goal setting, relocation assistance, and investing for long-term wealth to help clients reach their full potential.

Of the monthly dividend stocks mentioned in the article, I own O, BND, and PFF.

Go Forth & Make Passive Income From Monthly Dividend Stocks