Dividend stocks are great for investors who need steady income to pay recurring bills. But, since most phone and utility companies charge their customers by the month but most companies only pay a dividend once per quarter, sometimes a little financial juggling is necessary.
Not all dividend-paying outfits stick to the typical quarterly payment schedule, though. A handful of them dish out their dividends on a monthly basis, just like their shareholders are billed. Here's a rundown of three monthly dividend stocks worth a look, none of which are overwhelmingly exposed to the potential fallout from the coronavirus pandemic.
Realty Income
It's a name that usually earns a spot on any list of monthly dividend payers to consider, but it's well-deserved recognition. Realty Income (O -1.67%) is built to last.
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That might be a bit tough to believe with just a quick glance at the company's business model. Realty Income is a real estate investment trust that specializes in consumer-facing properties needed by retailers. Not only was the retail apocalypse still in full swing as of February, but the advent of COVID-19-related lockdowns in the meantime may well be the breaking point for some of these store chains.
Take a closer look at Realty Income's top tenants, though, and you'll see many of its customers are the names that have been allowed to remain open while others have been forced to close. And, you'll also see most of its tenants are companies with staying power that should be able to continue making their rent payments.
Walgreens Boots Alliance, 7-Eleven, Dollar General, FedEx, and Dollar Tree are its five biggest tenants, although for the record, AMC Theaters and Regal Cinemas are its seventh- and eighth-biggest tenants -- Realty Income isn't completely immune to the impact of the coronavirus. Nevertheless, the underpinnings for most of what's presently a 5.6% yield are still intact.
Main Street Capital
Main Street Capital (MAIN 1.53%) is a private equity firm...mostly. The company describes itself as a private equity alternative, and though it mostly makes loans to the smaller names within the so-called middle market, it makes the occasional equity investment as well.
More importantly, Main Street Capital prides itself on not being a typical Wall Street firm, and instead focuses on finding ways to let its borrowers do what they do best, working with them rather than against them. Its portfolio includes outfits such as Vision Sign, Brew Crane and Rigging, Yellow Cab, Phantom Fireworks, and many other mid-sized companies in which investors wouldn't normally be able to invest.
It's a formula that works -- for the company, its companies, and for its shareholders. The annualized dividend yield now stands just under 11% -- paid monthly -- and while the payment does fluctuate to reflect changes in the economic backdrop, the sheer size of the yield makes Main Street Capital a nice second or third dividend name to own as a way to beef up total long-term income.
Stag Industrial
Stag Industrial (STAG 0.21%) is another name that would seemingly be vulnerable to the impact of COVID-19 should we spiral into a recession. In fact, it probably is vulnerable -- at least to some degree. Given that the lockdown-related slowing could ease almost as quickly as it started once the lockdowns ends, though, it may be a bit premature to jump to conclusions about the future of the global economy anyway.
Stag Industrial is, as the name suggests, a REIT that specializes in industrial spaces. Warehouses and distribution centers are its core business, though it has some light manufacturing facilities in its portfolio as well. All told, it has 450 properties providing 91.4 million square feet of working and storage space to its renters, who are collectively supporting the REIT's dividend yield of 5.8%.
Where Stag really stands out is that it's not just an owner. It's also a developer, and in some cases a redeveloper, that can make buildings and land more marketable to potential tenants. The company also notes that 43% of its rented space is allocated to e-commerce activity, which hasn't been hampered as much as brick and mortar retailing has by COVID-19.
