Dividend investors look for promising investment opportunities that provide steady cash flow. Some corporations offer quarterly dividend distributions for their investors and raise them yearly. Reinvesting dividends can help you compound your dividend income even more.
Buying enough dividends can lead to monthly cash distributions. If one stock distributes dividends in January, another offers them in February and a third stock pays out dividends in March, you’re covered for the entire first quarter. You will receive a monthly payout if each dividend stock pays out every three months.
While you can construct a portfolio with monthly payments in mind, some dividend stocks simplify matters with monthly cash flow. You will receive monthly cash flow if you buy shares of any of the stocks listed below.
Main Street Capital (MAIN)
Main Street Capital (NYSE:MAIN) has a 6% yield and distributes monthly dividends. The stock has been up by 20% over the past year and has more than $7 billion in investment capital under management. The firm lends money to lower-middle market companies. This distinct market offers less correlation to broader stock market performance. This stock can remain flat while stocks are enduring sharp corrections.
The financial firm sets several requirements for its clients. Main Street Capital looks for companies with revenue between $10 million and $150 million with EBITDA ranging from $3 million to $20 million. These parameters increase the likelihood of Main Street Capital’s team making profitable investments.
The company has a diversified portfolio, which features 190 companies. The company has the most exposure to Machinery (8%), Internet Software & Services (8%) and Professional Services (6%). The company’s capital is spread across businesses located in the United States.
Stag Industrial (STAG)
Stag Industrial (NYSE:STAG) is an industrial real estate investment trust that prioritizes warehouses and storage facilities. The company has more than 500 buildings in 41 states, encompassing 112.3 million square feet.
The stock isn’t the type to outperform the market, and that’s a common theme among companies that offer monthly dividends. Stag Industrial has been up 27% over the past five years and has a 4% dividend yield.
The REIT has been expanding its profit margins and reached a 22.8% net profit margin in the fourth quarter of 2023. We also featured $41.7 million in net income this quarter, a 40% year-over-year improvement. Revenue increased by 7.6% year-over-year.
Stag Industrial has a large portfolio of tenants, including large corporations. These companies pay out steady rent payments to keep their storage facilities. Many of Stag’s customers rely on these properties to operate smoothly. This dynamic results in steady cash flow for Stag and its investors.
Realty Income (O)
Realty Income (NYSE:O) is another real estate investment trust that delivers monthly dividends and steady cash flow for its investors. The company recently increased its dividend for the 124th time. It also marks its 645th consecutive monthly dividend throughout its 55-year operating history.
Realty Income makes its money from many tenants. Casino giants, grocery chains, convenience stores and fast food restaurants are some of the company’s clients. The stock has been a bumpy ride for investors as shares are down by 23% over the past five years. However, a 5.82% dividend yield and monthly cash distributions have helped investors break even.
Realty Income isn’t going to outperform the stock market. However, it is a viable long-term business and can be a buying opportunity in the dips. This stock is strictly for people who are approaching retirement. It’s not the best stock for young investors with lengthier time horizons.
On the date of publication, Marc Guberti did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
