If you're an income investor, it can be a little overwhelming to choose the best dividend stocks to fill your portfolio. There are so many to choose from -- thousands of stocks and funds from which you can get a quarterly dividend payment. In fact, there are even exchange-traded funds that qualify as dividend ETFs, with dividend reinvestment plans that automatically reinvest the dividend into your account.
Then there are monthly dividend stocks, which pay out more often. I actually prefer these types of dividend stocks because investors get their money quicker than waiting until the end of the quarter, which means that you have more control to reinvest those funds and get the money working for you. And if you are relying on the monthly dividend stock for income, there's nothing more reliable than a monthly payout to help you manage your finances.
There are several dozen monthly dividend stocks, but my favorite is the one that's most reliable and provides a great payout -- Realty Income (O -0.56%). And you can take a position in this real estate dividend stock for just $100.
Image source: Getty Images.
A closer look at Realty Income
Realty Income has a mammoth footprint. The company leases more than 15,600 properties around the country, in the U.K., and throughout Europe to more than 1,600 clients. And the company has a diversified, stable income stream -- more than 98% of its portfolio is occupied, and its tenants represent more than 90 industries. That helps guard the company and its investors from industry-specific downturns.
| Sector | Percentage of Total Portfolio Annualized Contractual Rent |
|---|---|
| Grocery stores | 10.7 |
| Convenience stores | 9.8 |
| Home improvement | 6.4 |
| Dollar stores | 6.2 |
| Fast-food restaurants | 4.9 |
| Drug stores | 4.6 |
| Automotive service | 4.3 |
| Casual dining restaurants | 3.8 |
| General merchandise | 3.3 |
Source: Realty Income. Data as of June 30, 2025
The company's top clients include 7-Eleven, Dollar General, Walgreens, Dollar Tree, FedEx, Home Depot, and Walmart -- a literal who's who of major retailers that are found in nearly every community.
Realty Income as an investment
Realty Income is a real estate investment trust, which is a type of company created by Congress more than 60 years ago. REITs can focus on a specific segment, such as commercial, residential, retail, or industrial real estate. Some of them even track data center facilities -- which are becoming even more popular through the advent of artificial intelligence and cloud computing -- or the infrastructure that handles energy pipelines, communication towers, and cable networks.
What makes REITs most interesting for investors is their unique tax structure. They don't pay federal corporate income tax, so investors don't see the earnings taxed twice (most companies pay tax on their profits, and then the investor pays tax on dividends received). And REITs are required by law to pay out at least 90% of their profits to shareholders, so the dividend is usually above average.
Realty Income's dividend yield is 5.5%, which is a full percentage point higher than the average yield for a real estate stock. And the dividend is remarkably consistent -- this month, Realty Income issued its 662nd consecutive monthly dividend and has increased its dividend every quarter for more than 27 years.
Revenue in the second quarter was $1.41 billion, up from $1.34 billion a year ago, although income fell to $196.9 million and $0.22 per share from $256.6 million and $0.29 per share. The stock is up 10% so far this year (versus the S&P 500's return of 9%), and provides a total return of 12.5% in 2025.
The bottom line
Realty Income isn't the most glamourous stock out there -- high-powered tech stocks Microsoft and Meta Platforms are also offering a small dividend of less than 1%, and also are involved in building AI applications and data centers that are getting a lot of investor attention these days.
But I'm not investing for the glamour. I want consistent returns, and I get that with Realty Income. I think it's the best dividend stock you can buy today, and if you invest only $100 per month, you can quickly build an enviable position and start enjoying a monthly return.
