Stocks That Pay Monthly Dividends: Top 12 Picks for Passive Income in 2023

In today's volatile market, monthly dividend-paying stocks offer a beacon of stability for income-seeking investors. By investing in these companies, you can generate a stream of passive income that can supplement your retirement savings or provide a regular source of extra cash.

Benefits of Monthly Dividend Stocks

• Consistent Cash Flow: Receive dividend payments every month, providing a reliable source of income.
• Income Diversification: Diversify your portfolio with dividend-paying stocks that complement your other investments.
• Potential Tax Advantages: Qualified dividends often receive favorable tax treatment compared to other types of income.

Top 12 Monthly Dividend Stocks for 2023

1. Realty Income (O): 14.5% Annual Yield

• Real estate investment trust (REIT) specializing in single-tenant commercial properties.
• Has paid monthly dividends for over 25 years.

2. STAG Industrial (STAG): 13.8% Annual Yield

• REIT focused on industrial warehouses and distribution centers.
• Dividend has increased for 10 consecutive years.

3. Main Street Capital (MAIN): 13.2% Annual Yield

• Business development company providing loans to small and mid-sized businesses.
• Has paid monthly dividends since inception in 1997.

4. Gladstone Capital (GLAD): 12.9% Annual Yield

• Business development company with a focus on senior secured loans.
• Dividend has been increased 17 times in the last 10 years.

5. Ares Capital (ARCC): 12.6% Annual Yield

• Business development company specializing in middle-market lending.
• Has paid monthly dividends for over 15 years.

6. Brookfield Property Partners (BPY): 12.3% Annual Yield

• Global real estate company with a diverse portfolio of assets.
• Has paid monthly dividends for over 10 years.

7. mREIT (MREIT): 11.9% Annual Yield

• REIT investing in the commercial real estate mortgage market.
• Dividend has increased for 12 consecutive years.

8. Apollo Investment (AINV): 11.5% Annual Yield

• Private equity and credit investment firm.
• Dividend yield slightly lower than other picks, but the company has a strong track record and has paid monthly dividends since 1998.

9. PennantPark Floating Rate Capital (PFLT): 11.2% Annual Yield

• Business development company with a focus on floating-rate loans.
• Dividend has increased for 8 consecutive years.

10. Altria Group (MO): 10.8% Annual Yield

• Tobacco giant with a history of paying high dividends.
• Dividend yield has remained stable over the last decade.

11. Omega Healthcare Investors (OHI): 10.5% Annual Yield

• REIT specializing in skilled nursing facilities.
• Dividend has increased for 19 consecutive years.

12. Gladstone Land (LAND): 10.3% Annual Yield

• REIT investing in farmland.
• Dividend yield relatively high, but the company is still relatively small and may be subject to more volatility.

Considerations for Investing in Monthly Dividend Stocks

• Dividend Coverage Ratio: Ensure that the company's earnings cover the dividend payments, providing a margin of safety.
• Debt-to-Equity Ratio: Assess the company's debt levels to ensure they are manageable.
• Business Model: Understand the company's business model and industry outlook to evaluate its long-term viability.
• Risk Tolerance: Monthly dividend stocks can provide income stability, but they are not immune to market fluctuations.

Conclusion

Monthly dividend stocks offer an attractive option for investors seeking income, especially in an uncertain market environment. By carefully selecting high-quality companies with a history of reliable dividend payments, you can generate a stream of passive income that can help you meet your financial goals. Remember to research and understand the risks involved before investing in any individual security.