Since going public in 2007, it has delivered more than 1,770% in total returns to its shareholders, while its earnings per share have increased 1,850%. Since 2010, it has more than doubled its dividend, and while management will lower the payout (as it did during the pandemic) when economic pressures are highest, the long term has been regular, consistent payout growth.
How do monthly dividend stocks work?
Monthly dividend stocks work like other dividend-paying companies, with the difference being that instead of the more typical quarterly payout, monthly payers send money to their shareholders (or more commonly, their brokerage accounts) every month. The result is a smaller but more frequent payout.
This is handy for investors who may be using their dividends to cover real-world expenses or who are regularly reinvesting them. Most monthly dividend stocks are REITs, giving them consistent, regular monthly cash flows that make paying their shareholders a little easier.
Pros and cons of investing in monthly dividend stocks
Pros:
- Monthly dividend checks may be preferable if you're using dividends for income now.
- Monthly payers are often extremely dependable dividend stocks.
- Monthly dividend stocks are often REITs, which often also pay higher yields.
Cons:
- Monthly dividend payers are typically REITs, which usually means higher taxes paid on your dividends versus qualified dividends from regular corporations.
- Monthly dividend stocks, like all companies, don't always grow or even maintain their dividends. This article provides some examples of monthly dividend stocks that have had to lower their dividends in the past.
How to invest in monthly dividend stocks
- Open your brokerage account: Log in to your brokerage account, where you handle your investments.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Invest in monthly dividend stocks for recurring income
Monthly dividend stocks make it easy for investors to earn passive income. They can use that money to cover their monthly expenses or reinvest their dividends and set themselves up to generate even more recurring cash flow in the future when they need it.
While dozens of companies pay monthly dividends, these stocks stand out as either safer, more stable dividend stocks or, in a few cases, riskier -- but potentially more rewarding -- investments in their potential to turn things around.
