Dividend stocks are a great way to start earning passive income. However, one minor inconvenience of most dividend stocks is that they only cut checks quarterly. Because of that, the dividend income can be somewhat lumpy.

One solution to this issue is to buy monthly dividend stocks. Three excellent monthly payers worth considering are Agree Realty (ADC -0.67%)Gladstone Land (LAND -0.75%), and Pembina Pipeline (PBA -0.06%).

A smiling person depositing a check with their phone.

Image source: Getty Images.

Collect rental income without any work

Agree Realty is a real estate investment trust (REIT) that owns a portfolio of free-standing retail properties. While retailers face headwinds from e-commerce, Agree Realty focuses on very specific tenants, enabling it to generate steady rental income.

First, it focuses on leasing space to essential retailers less likely to experience disruption from e-commerce. Its top tenants include grocery stores, home improvement stores, tire and auto service centers, convenience stores, dollar stores, and pharmacies. Further, it primarily focuses on retailers with investment-grade credit ratings (68% of its rental income comes from IG-rated retailers), which suggests they have the strength to meet their financial obligations during an economic downturn. Finally, Agree Realty utilizes triple-net leases, where the tenant bears responsibility for real estate taxes, building insurance, and maintenance.

Meanwhile, the REIT complements its solid portfolio with a strong financial profile, including an investment-grade credit rating and a conservative dividend payout ratio for a REIT. Those factors give Agree Realty the financial flexibility to expand its portfolio. That steady growth has enabled the REIT to consistently increase its dividend, which it started paying monthly earlier this year. Agree Realty has grown its payout at a 5% compound annualized rate over the last 10 years and should be able to keep increasing it in the future as it acquires more cash-flowing free-standing retail properties. At a 3.6% dividend yield, Agree Realty is an excellent income stock.

A steadily growing dividend

Gladstone Land is also a REIT. It specializes in owning farmland and farm-related facilities that it triple-net leases to farmers. The company primarily buys farms used to grow healthy foods like fruits, vegetables, and nuts. These crops tend to generate steadier income for farmers than commoditized products like corn, soybeans, and wheat.

Gladstone has been steadily growing its farmland portfolio by acquiring new properties. It purchased 13 farms and more than 20,000 acre-feet of banked water for $79.7 million during the second quarter. Those farms should generate steadily growing rental income due to annual rent escalations, CPI adjustments, or participation rents (a share of the crops' profits). This year, the company has started acquiring water rights to reduce the draught risk for some of its farms. That should help further stabilize its rental income. 

Gladstone's growing farm portfolio has enabled it to steadily increase its dividend. The REIT has boosted its payout in 23 of the last 26 quarters, expanding it by 50.3% overall. The company aims to continue increasing its dividend at a rate that outpaces inflation, driven by steadily rising rents and additional farm acquisitions. At a 2.4% dividend yield, Gladstone offers an above-average monthly income stream.  

A steady flow of dividends

Pembina Pipeline is a Canadian energy infrastructure company. It operates pipelines, processing plants, storage terminals, and export facilities. The company, in a sense, operates an energy toll booth, collecting a steady stream of fees as oil and gas flow through its integrated system. That stable cash flow supports Pembina's 6.1%-yielding monthly dividend. 

While climate change concerns are forcing the global economy to shift toward cleaner alternatives, this energy transition will take decades. Because of that, demand for oil and gas will continue growing in the coming years, providing Pembina with additional opportunities to expand its energy infrastructure footprint. The company has more than $1 billion of commercially secured expansion projects under construction or ready to go. In addition, it has billions of dollars of potential expansion projects further along in the pipeline.

One notable project is the Alberta Carbon Grid, a joint venture with fellow Canadian energy infrastructure company TC Energy to build a world-scale carbon dioxide transportation and sequestration system in Western Canada. Projects like that will help reduce the energy industry's carbon footprint. Meanwhile, Pembina is exploring other cleaner alternatives like wind energy, cogeneration, and hydrogen.

Future investments (organic expansions and acquisitions) should give Pembina the fuel to continue growing its dividend. While the company hasn't increased its dividend since early 2020 due to the pandemic, it had a long history of consistent dividend growth before that blip. As market conditions improve and its current slate of expansions come online, Pembina should be able to start growing its monthly payout again. 

Excellent options for monthly income

Monthly dividend stocks make it easier to earn passive income that you can use to offset a regular expense. While only a small group of stocks cut checks each month, investors have some attractive options in Agree Realty, Gladstone Land, and Pembina Pipeline. All three companies offer dividend yields well above the S&P 500 and have a history of steadily increasing their payouts.