Most stocks pay dividends on a quarterly schedule. But some investors such as retirees might desire even more frequent dividend payments. Fortunately, there are stocks that make monthly dividend payments, which can help smooth out cash flows for shareholders. Three of our favorite monthly dividend stocks include Main Street Capital (MAIN), Realty Income (O), and STAG Industrial (STAG).

Monthly Dividend Stock: Main Street Capital

Main Street Capital is a Business Development Company, or BDC, that provides long-term debt and equity capital to lower middle market companies and debt capital to middle market companies. Main Street defines lower middle market companies as generally having annual revenues between $10 million and $150 million. The company’s investments typically support management buyouts, recapitalizations, growth financings, refinancing and acquisitions.

At the end of Q2 2022, Main Street had an interest in 75 lower middle market companies (valued at $1.8 billion), 34 middle market companies ($364 million) and 82 private loan investments ($1.3 billion). The company has a market capitalization of $3.2 billion and generated $183 million in net investment income in 2021.

In the 2022 second quarter, Main Street reported net investment income of $54.7 million for the second quarter was a 29% increase compared to $42.4 million in Q2 2021. The corporation generated net investment income per share of $0.75, up 21% year-over-year from $0.62 per share. Distributable net investment income per share totaled $0.80, up 21% from $0.66 in Q2 2021. Main Street’s net asset value per share increased compared to the end of 2021, from $25.29 to $25.37, a 0.3% increase.

Main Street pays a regular monthly dividend, which the company just increased by 4.8% to $0.22 per share. The company also pays supplemental dividends twice a year depending on the financial results over the course of the year. For example, Main Street skipped its supplemental dividends in 2020 due to COVID-19. However, the company is back to making supplemental dividends, which are currently paid at a rate of $0.10 per share to be paid in September, while the company keeps its trend of increasing the regular monthly dividend slightly every year. Shares currently yield 6% just from the monthly dividend payout, while any supplemental dividends make the yield even greater.

Monthly Dividend Stock: Realty Income

Realty Income is a very appealing monthly dividend stock, because it has a safe dividend and a long history of making consistent payouts to shareholders, even during recessions. For example, the company has declared 626 consecutive common stock monthly dividends, a track record spanning over 50 years. Realty Income has also increased its dividend for over 25 consecutive years, which places it on the exclusive Dividend Aristocrats list.

Realty Income is a Real Estate Investment Trust, or REIT, that owns retail properties. The trust owns more than 4,000 standalone properties that hold a number of various tenants including government services, healthcare services, and entertainment.

Realty Income announced its second quarter earnings results on August 3. The trust reported that it generated revenues of $810 million during the quarter, which was 75% more than the revenues that Realty Income generated during the previous year’s quarter. Realty investments into new properties and its acquisition of VEREIT that closed in late 2021 accounted for most of the growth.

Due to the steady growth of Realty Income’s profits, even during the last financial crisis, the dividend looks sustainable. Shares currently yield 4.2%.

Monthly Dividend Stock: STAG Industrial

STAG Industrial is a Real Estate Investment Trust, or REIT, that owns industrial properties such as warehouses and more. It is focused on single-tenant industrial properties and has 544 buildings across 40 states. STAG has built a solid operating history. It has incurred credit losses that have been less than 0.1% of its revenues since its IPO. Furthermore, its Funds From Operation have grown at a 6% annual rate in the past decade.

This year has been strong for STAG as it benefits from continuing demand for industrial properties. Last quarter, revenue of $161.5 million rose 16.7% year-over-year. Cash net operating income of $129 million rose 18.6% year-over-year. FFO-per-share of $0.56 increased 7.7% from the same quarter last year. Occupancy for the total portfolio was 98.1% during the quarter.

There is plenty of growth up ahead for STAG Industrial, mainly due to the ongoing boom in e-commerce shipping. The U.S. industrial market is more than $1 trillion in size and STAG Industrial still has a market share that is less than 1% of its target market, which includes the top 60 markets of the country.

In the meantime, the company makes monthly dividend payments to shareholders and grows the payout on a regular basis. STAG Industrial stock currently yields 4.5%.
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Bob Ciura has worked at Sure Dividend since October 2016. He oversees all content for Sure Dividend and its partner sites. Bob received a Bachelor’s degree in Finance from DePaul University, and an MBA with a concentration in Investments from the University of Notre Dame.