3 Monthly Dividend Stocks to Buy for Cash Flow

Let’s face it – most of the time finding success in the stock market is all about practicing patience. Whether it's anticipating a good entry point or sitting tight over the long term so that a company can execute its business plan, good things often come to investors that can wait. This also holds true for dividend investors, as they typically only get paid once every quarter. However, if you are an investor that doesn’t want to wait for quarterly payouts, monthly dividend stocks are a very attractive option.

Monthly dividend stocks can be great for boosting your monthly income, compounding your returns, and delivering impressive annualized yields. Keep in mind that a company has to be confident in its ability to generate enough cash flows to cover the payouts, which means they are likely to have established and reliable businesses. If you are interested in safe and consistent payouts that don’t require you to wait months to receive them, take a look at our list of 3 monthly dividend stocks to buy for cash flow.

STAG Industrial (NYSE:STAG)

As you learn more about monthly dividend stocks, you will quickly realize that the majority of them are REITs. That’s because most REITs have tenants in long-term contracts that pay the company monthly rent, which in turn the company can return to shareholders in the form of dividends. STAG Industrial is a great option to consider as it’s a REIT that also offers investors exposure to e-commerce. As a company that invests in warehouse and distribution buildings, light manufacturing buildings, and flex/office buildings, it has a ton of properties that large-scale e-commerce businesses need.

With over 40% of STAG’s portfolio leased to e-commerce tenants, it’s a unique way to benefit from the growing trend in online shopping. The stock pays a 4.05% dividend yield and the company’s biggest tenant is Amazon NASDAQ: AMZN, which are both strong selling points for STAG Industrial. It’s not a stock that will rocket up higher like some of the pure-play e-commerce stocks, but it’s certainly a safe bet for long-term growth and steady monthly income.

Realty Income (NYSE:O)

Perhaps the most well-known monthly dividend stock out there is Realty Income, which is a company that has literally trademarked “The Monthly Dividend Company” as its nickname. It’s a REIT that owns, develops, and manages retail real estate across the United States. It focuses on single-tenant properties and tends to operate with triple net leases where the tenant assumes financial responsibility for real estate taxes, insurance, and maintenance costs.

Realty Income has exposure to over 50 different industries, which is great since many of them are recession-proof and not at risk of losing business as a result of growth in e-commerce. For example, exposure to convenience stores, drug stores, dollar stores, grocery stores, and health & fitness means that Realty Income should be able to keep the monthly dividends going out to investors for many years to come. The stock currently offers investors a 4.14% dividend yield and has paid monthly dividends for 610 consecutive months, which is exactly the kind of consistency that investors love to see.

Gladstone Capital (NASDAQ:GLAD)

The only stock on our list that’s not a REIT is Gladstone Capital, a small closed-end non-diversified management investment company. The company’s goal is to achieve and grow current income by investing in debt securities of established businesses that it thinks will be able to deliver stable earnings and cash flow. Gladstone focuses on small and mid-sized companies with loans ranging from $7 to $30 million and has developed a diversified portfolio spanning 47 different companies.

It’s an interesting option because Gladstone has exposure to a lot of different industries including electronics manufacturers, aerospace companies, real estate firms, and more. It’s worth noting that 92.5% of the portfolio is in loans secured by collateral and that the company has a conservative capital base with a debt-to-equity ratio of 86.1% as of Q2, which should give investors extra peace of mind. The stock currently offers a very attractive 7.11% dividend yield, which is certainly appealing in today’s low-interest-rate environment.