There are two components to a stock’s total return: capital appreciation and income. Capital appreciation refers to the straightforward concept of an increasing market value as reflected by its stock price. If you buy a stock at $10 and a year later the stock trades at $12, the stock has appreciated 20%. The income component of total return involves the cumulative value of the stock’s dividend distributions for the period. If the hypothetical stock referenced above paid $1 in dividends in addition to the $2 in growth it experienced, the total return of the investment would be 30% rather than 20%. In short, a stock’s growth and its income complement each other.
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Not all stocks pay regular dividends. Many public companies choose instead to reinvest revenue and profits into operations to expand market share, develop new products or upgrade technology. Of the stocks that do pay dividends, most pay quarterly. A select few — less than 100 — adhere to a monthly distribution schedule.
Almost all monthly dividend stocks are specialty companies that provide income as a primary objective. These include real estate investment trusts (REITs), master limited partnerships (MLPs) and business development companies (BDCs), all of which are required by law to distribute at least 90% of taxable income to shareholders as regular dividends. They also include natural resource royalty trusts, which have no corporate functions other than collecting and distributing royalty income and disseminating tax information. Several public utilities have opted to pay monthly dividends as well.
Many income-oriented investors prefer monthly dividends. One reason is that monthly income is a better hedge against inflation. When prices rise, purchasing power falls, and monthly dividends put your income to work sooner. Also, monthly dividends are easier to integrate into a personal budget. Most people, after all, pay their bills and organize their financial lives on a monthly basis. In the final analysis, it’s simply better to get paid sooner rather than later.
If you prioritize income as an investment objective and appreciate a monthly payout, read over this list of seven monthly dividend stocks to buy now and consider adding one or more of them to your portfolio:
| Monthly Dividend Stock | Market Capitalization | Forward Dividend Yield* |
| PermRock Royalty Trust (ticker: PRT) | $51.7 million | 12.3% |
| Ellington Financial Inc. (EFC) | $1.1 billion | 12.4% |
| Gladstone Capital Corp. (GLAD) | $661 million | 7.8% |
| LTC Properties Inc. (LTC) | $1.6 billion | 6.7% |
| Realty Income Corp. (O) | $48.2 billion | 5.8% |
| SL Green Realty Corp. (SLG) | $5.1 billion | 4.6% |
| Main Street Capital Corp. (MAIN) | $5.5 billion | 6.7% |
*As of Jan. 30 close.
PermRock Royalty Trust (PRT)
Conservative estimates show that the Permian Basin — which covers large tracts of land in West Texas and New Mexico — contains more than 70 billion barrels of recoverable crude oil and 300 trillion cubic feet of natural gas.
PRT operates as a statutory royalty trust focused solely on collecting and distributing income royalties from certain mineral rights claims in that energy-rich region. The company does not explore for oil or gas or operate wells itself. Instead, it holds the rights to 80% of net profits from the sale of energy that’s produced by Boaz Energy, which operates several producing wells in the area.
Like many royalty trusts, PRT offers an exceptional dividend yield, especially when hydrocarbon commodity prices are high. The high yield can be attractive to retired people or others on a fixed income, but the superior income is not without risk. Oil and gas prices could fall, hurting the stock’s distribution rate, and production from existing wells could decline over time. Investors should also realize that the trust cannot acquire new claims or expand operations in other ways. PRT is an income play with minimal growth potential.
PRT has a market cap of about $52 million. It distributes dividends monthly based on the net profits it receives. The dividend rate can fluctuate based on several factors, such as production volume and oil prices.
Forward dividend yield: 12.3%
Ellington Financial Inc. (EFC)
EFC is a specialty mortgage REIT, or mREIT. An mREIT does not own buildings or hold income-producing real estate directly. Instead, it buys real estate loans, commercial mortgages and mortgage-backed bonds and holds them for interest income.
Old Greenwich, Connecticut-based EFC not only buys mortgage paper, but it also originates reverse mortgages and holds them for its own account.
The company has two divisions. The first is its Investment Portfolio segment, which buys a special class of U.S. government agency bonds called residential mortgage-backed securities, or RMBS. Its other division, called Longbridge Financial, markets reverse mortgage loans to retired people. The company originates and underwrites the loans and collects interest until they mature or are redeemed.
EFC has a market cap of over $1.1 billion.
Forward dividend yield: 12.4%
Gladstone Capital Corp. (GLAD)
GLAD is organized and incorporated as a business development company, or BDC. GLAD is essentially an investment company that makes its money by making high-interest loans and profitable equity investments to small and midsized private companies throughout the U.S.
In some ways, GLAD is similar to a closed-end mutual fund, but there are several key differences. For one thing, GLAD, being a BDC, avoids corporate taxation by distributing at least 90% of taxable income to shareholders as a dividend. This is the principal reason GLAD and other BDCs are considered mainly income-generation vehicles.
GLAD has a market cap of around $660 million. In 2024 the company had almost $50 million in new loan and investment volume. The weighted average yield on its interest-bearing investments in 2024 was 13.9%.
Forward dividend yield: 7.8%
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LTC Properties Inc. (LTC)
LTC is a large, well-established REIT with a market cap that exceeds $1.5 billion. LTC operates in the health care segment of the commercial real estate industry. Specifically, it owns senior housing and skilled nursing facilities.
LTC acquires its properties mostly through sale-and-leaseback transactions. That is, it buys properties from hospital and nursing home operators and then leases them back to the previous owners on a long-term, triple-net basis, usually between 15 and 50 years. In this way, LTC can collect rent while avoiding having to operate the businesses or maintain the buildings.
The company is active in 26 states and has a portfolio of over 200 high-quality facilities. LTC is very picky about its tenants. It currently rents to a select group of just 29 hospital operators.
Forward dividend yield: 6.7%
Realty Income Corp. (O)
This $47 billion REIT should be on the top of any monthly dividend stock investor’s list. Realty Income is well known for paying consistent monthly dividends and increasing them every year.
O is a component of the S&P Dividend Aristocrats Index. That means it is included in the S&P 500 and has increased its dividend for at least 25 consecutive years. In point of fact, O has raised its annual dividend for 30 years in a row.
This well-respected REIT owns more than 13,000 properties in prime locations around the U.S. Its specialty is retail outlets, including big box stores, franchised convenience stores and large chain drug stores.
When O reports its 2024 full-year earnings on Feb. 24, Wall Street expects about $5 billion in revenue. Analysts are looking for a moderate 6% revenue increase to $5.3 billion in 2025.
Forward dividend yield: 5.8%
SL Green Realty Corp. (SLG)
New York City is one of the biggest, most dynamic real estate markets in the world, and SLG is one of the city’s largest commercial landlords. In fact, SLG has an equity interest in over 30 million square feet of prime office space in downtown Manhattan and around NYC.
Beyond just buying and operating office buildings, this $5 billion REIT is a major developer of office and mixed-use properties in the city. The company has several exciting projects under construction and several more on the drawing board.
Investors will be happy to know that SLG is committed to improving its financial picture. It is systematically and purposefully refinancing its debt on favorable terms as the interest rate environment allows.
Forward dividend yield: 4.6%
Main Street Capital Corp. (MAIN)
MAIN is a New York Stock Exchange-listed BDC with a market cap of $5.4 billion. The company’s focus is on providing long-term loans and preferred equity investments to lower-middle-market private and public companies.
Borrowers use proceeds from the loans to fund buyouts, mergers, restructuring and general operational growth. MAIN targets companies with between $10 million and $150 million in annual revenues. The firm makes a point to diversify its investments across several sectors and industries to mitigate risk.
MAIN has a solid history of paying regular monthly dividends and, on occasion, special supplemental dividends. In 2024, the stock paid a total of $4.11 in dividends per share and, although the dividend rate is not guaranteed, is on pace to pay that much or more in 2025.
Forward dividend yield: 6.7%
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7 Best Monthly Dividend Stocks to Buy Today originally appeared on usnews.com
Update 01/31/25: This story was published at an earlier date and has been updated with new information.
