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2 Stocks That Pay You Each Month

By Lawrence Rothman, CFA - Apr 2, 2021 at 7:15AM

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If you're looking for frequent, secure dividends, these fit the bill.

If you are looking to gain reliable income from your investments, dividend-paying stocks are good options to explore. Typically, companies paying dividends make these payments quarterly. Those looking for more frequent dividends payouts can choose stocks that pay monthly.

A real estate investment trust (REIT) is often a good place to start your search when looking for dividend-paying stocks since its tax structure requires that the company pay out at least 90% of its taxable income to its shareholders.

Let's take a closer look at two REITs that are good choices for those investors seeking reliable and frequent dividend payments.

A calendar with the pin on the 30th and stacks of coins on other dates.

Image source: Getty Images.

1. Realty Income

Realty Income (O 1.25%) refers to itself as "The Monthly Dividend Company." That apt description makes it a perfect choice for those wishing to receive payments in short intervals. Founded more than 50 years ago, Realty Income has raised dividends annually for more than 25 straight years, making it a Dividend Aristocrat.

It rents nearly all of its 6,600 properties to retailers, an industry besieged by consumers shifting their shopping habits to the internet, which the pandemic accelerated. However, it offsets these risks by leasing to large, established, financially stable companies, such as Walgreens Boots Alliance, Dollar General, and Walmart.

Last year's results -- despite the pandemic bringing challenges to its movie theater and fitness club tenants (5.6% and 6.8% of its rental properties, respectively) -- bore out Realty Income's approach. This includes collecting nearly 94% of the rent due in the fourth quarter and ending the year with about a 98% occupancy rate.

Realty Income raised the monthly per-share dividend from $0.234 to $0.2345 starting in January and often hikes payments more than once a year. It has a 4.4% dividend yield.

2. Stag Industrial

Stag Industrial (STAG 0.31%) owns industrial properties, such as warehouses and distribution centers, in the U.S. While it rents to single tenants, management lessens the risk by diversifying across tenants, industries, and geographies.

Stag's top 20 tenants bring in about 20% of its rents, with its largest, Amazon, representing less than 4%. Better still, these are the types of properties that will keep doing well as online orders continue gaining traction.

At the end of 2020, its occupancy was about 97% and it collected virtually all of the rent due.

The board of directors regularly raises dividends modestly, including this year's per-share increase from $0.12 a month to $0.121. More impressively, the company has raised payments at a time when others have cut dividends. Stag Industrial's dividend yield is 4.3%.

Both are reliable

It is certainly nice to receive dividend payments every month. But it is even more important that you can rely on the companies to deliver payments without cutting them. In this regard, both companies have a good track record of not only maintaining payments, particularly during rough times like the last year, but also regularly increasing them.

That makes Realty Income and Stag Industrial fine choices for monthly dividend stock investors.

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Stocks Mentioned

Realty Income Corporation Stock Quote
Realty Income Corporation
$67.99 (1.25%) $0.84
STAG Industrial, Inc. Stock Quote
STAG Industrial, Inc.
$32.35 (0.31%) $0.10

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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