Stocks That Pay Monthly Dividends: A Guide

_{October 28, 2023 by JoyAnswer.org, Category : Finance}

What stocks pay dividends monthly? Learn about stocks that pay dividends on a monthly basis and how they can provide a steady stream of income for investors.

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What stocks pay dividends monthly?

Investors looking for regular income through dividends often seek out stocks that pay dividends on a monthly basis. Monthly dividend stocks can provide a consistent cash flow. While they may not always offer the highest dividend yields, they can be attractive to income-focused investors. Here are a few examples of stocks and types of investments that often pay dividends monthly:

Real Estate Investment Trusts (REITs): Many REITs, which invest in income-generating properties like apartment buildings, shopping centers, and office buildings, distribute dividends on a monthly basis. Examples include Realty Income Corporation (O), EPR Properties (EPR), and Stag Industrial (STAG).
Business Development Companies (BDCs): BDCs often provide financing to small and medium-sized businesses and are known for their monthly dividend payments. Some examples include Main Street Capital (MAIN) and Prospect Capital Corporation (PSEC).
Closed-End Funds (CEFs): Certain closed-end funds are structured to provide monthly income to investors. Examples include the PIMCO Dynamic Credit and Mortgage Income Fund (PCI) and the BlackRock Enhanced Equity Dividend Trust (BDJ).
Monthly Dividend ETFs: Some exchange-traded funds (ETFs) are designed to track a basket of monthly dividend-paying stocks or income-generating assets. Examples include the Global X SuperDividend ETF (SDIV) and the Invesco KBW High Dividend Yield Financial ETF (KBWD).
Utility Stocks: Some utility companies pay dividends on a monthly basis. These include businesses like Consolidated Edison, Inc. (ED) and Duke Energy Corporation (DUK).
Telecommunication Stocks: A few telecommunications companies distribute monthly dividends. One example is Shaw Communications Inc. (SJR).
Preferred Stocks: While not common, some preferred stocks are designed to pay monthly dividends. These are shares of a company's stock that usually have a fixed dividend rate. They can be found from various companies and industries.
Master Limited Partnerships (MLPs): Certain MLPs, such as Enterprise Products Partners L.P. (EPD) and Enbridge Energy Partners, L.P. (EEP), distribute monthly dividends. However, MLPs have unique tax considerations.
Monthly Dividend-Paying Stocks: While less common among traditional common stocks, some individual companies choose to pay dividends monthly. One example is AGNC Investment Corp. (AGNC), a mortgage real estate investment trust.

Keep in mind that investing in dividend-paying stocks, whether monthly or otherwise, carries risks, and it's essential to conduct thorough research and consider your investment goals and risk tolerance. Additionally, tax implications may vary depending on the type of investment and your country of residence, so it's a good idea to consult with a financial advisor or tax professional when building an income-focused investment portfolio.

What are monthly dividend stocks, and how do they work?

Monthly dividend stocks are stocks that pay dividends to shareholders on a monthly basis. This is in contrast to most stocks, which typically pay dividends quarterly or annually.

Companies that pay monthly dividends typically do so because they have a steady stream of cash flow. This can be the case for companies in industries such as utilities, consumer staples, and real estate.

Where can you find a list of stocks that pay dividends monthly?

There are a number of websites and financial publications that provide lists of stocks that pay dividends monthly. Some popular sources include:

Dividend.com
Nasdaq
Investopedia
The Motley Fool

What are the benefits and risks of investing in monthly dividend stocks?

Some of the benefits of investing in monthly dividend stocks include:

Regular income: Monthly dividend stocks can provide investors with a regular stream of income. This can be beneficial for retirees and other investors who need to generate income from their investments.
Potential for capital appreciation: Monthly dividend stocks can also appreciate in value over time. This means that investors can potentially earn a profit on both the dividends they receive and the increase in the value of their shares.

Some of the risks of investing in monthly dividend stocks include:

Dividend cuts: Companies can cut or eliminate their dividends at any time. This can reduce or eliminate the income that investors receive from their investments.
Market risk: Monthly dividend stocks are subject to market risk, which means that their price can fluctuate up and down. This can result in losses for investors if they sell their shares when the price is below what they paid for them.

How to build a diversified portfolio with monthly dividend-paying stocks?

When building a diversified portfolio with monthly dividend-paying stocks, it is important to consider the following factors:

Company quality: It is important to invest in companies with strong track records of paying dividends. Investors should also consider the company's financial health and its prospects for future growth.
Dividend yield: The dividend yield is the annual dividend payment divided by the current share price. Investors should look for stocks with dividend yields that are above the market average.
Sector diversification: Investors should avoid investing too heavily in any one sector. Instead, they should spread their money across a variety of sectors, such as utilities, consumer staples, and real estate.