Dividends are one of the ways that companies reward their shareholders, and there's nothing sweeter than seeing cash returns show up in your account. As you probably already know, most stocks that pay dividends only do so on a quarterly basis. This means that if you want help with your bills, you'll either need to wait for the quarterly dividend to roll in, or carefully budget the most recent payout to make it last.
Luckily, there are a handful of stocks that send their dividend payments on a monthly schedule. While these equities are relatively less common than quarterly payout stocks, they're no less worthy of your investment. Let's check out three companies that distribute their dividends monthly so that you'll have a few ideas about where to invest for recurring income.
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LTC Properties
LTC Properties (LTC -0.78%) owns and invests in a plethora of healthcare facilities that cater to senior care, making it a healthcare real estate investment trust (REIT). As long as people keep getting old and needing a helping hand in skilled care facilities, LTC isn't going anywhere. While LTC's earnings took a hit last year and its margins may be slimmer moving forward because of additional expenditures on protective equipment to reduce infection risk, it's a great option for investors seeking a monthly dividend.
LTC's trailing dividend rate was $2.28, which works out to be a yield of 6.54% at its current price. Given that the company pays out 85.71% of its earnings as dividends and the fact that its debts are only $689.47 million compared to its trailing levered free cash flows of $95.93 million, its dividend is likely sustainable. Over the last three years, LTC's dividend has risen steadily, which could continue. While LTC's yield may not make you rich, it will definitely help to pay your monthly expenses if you invest enough, especially if you do so while the stock is still recovering from the crash in March.
Main Street Capital Corporation
Main Street Capital (MAIN 0.45%) is a business development and financial services company that issues loans to a diverse set of enterprises that have annual revenues up to $150 million. After loaning its cash, Main Street makes revenues when these companies repay their debts over time. Aside from having an evergreen business model, Main Street Capital successfully weathered the last recession, and it frequently issues small special dividends in addition to its monthly payouts. While you shouldn't rely on these special dividend payments as part of your monthly income strategy or consider them as major reasons in favor of purchasing this stock, it's true that they're a nice bonus when they do occur.
On Sept. 28, the company paid its shareholders a dividend of $0.205, which it has maintained since June of last year. This puts its yearly dividend at $2.46, for a trailing yield of 8.32%. Main Street's payouts are quite reliable, but it's important to remember that they aren't unshakeable. The company has cut its dividends by small portions in the past, and it has also refrained from issuing special dividends during periods of economic strife, like right now. So, if you choose to add the company to your portfolio, you should probably diversify your holdings so that you aren't completely reliant on the size of its dividend payments.
Realty Income Corporation
Realty Income (O -0.77%) is a prototypical REIT, making its revenues from fees provided by its collection of real estate properties. Of the stocks that I've discussed today, Realty Income is by far the one with the most reliable dividend income. In fact, the company's payments are so consistent that it is a member of the Dividend Aristocrats group, meaning that it has increased its dividend for at least 25 years in a row.
With such a strong record of dividend payments, each increase needs to be small in order for it to be sustainable, so you shouldn't expect your returns to massively increase over time. Realty Income's trailing dividend yield of 4.54% is also the lowest of the three stocks in this list, so there might be more lucrative dividend stocks for your money if you're willing to compromise on reliability. Nonetheless, it's important to remember that the trailing dividend rate of $2.76 will most likely continue to increase over time. The company's revenues and earnings have increased substantially over the last five years, and its profit margin of 30.3% is incredibly robust for such a mature industry.
