While it’s always nice to have passive income no matter the frequency, there’s just something satisfying about monthly dividend stocks. In large part, we’ve become trained to think in monthly cycles. As well, our bills come due every 30 days or so. Therefore, getting paid monthly helps investors to manage their income.
Another benefit to monthly dividend stocks centers on the concept of compounding benefits. Basically, investors have the choice to reinvest their dividends more frequently. By targeting the right opportunities three times in a quarter as opposed to once, this reinvesting process can stack up. In turn, the overall performance can be greater over time.
Lastly, payouts every 30 days can help reduce the volatility of income for stakeholders. By not having to be dependent on the timing of quarterly payments, investors enjoy more stability in their payouts. With so many advantages, it’s a good opportunity to consider monthly dividend stocks to buy.
Whitestone REIT (WSR)
Based in Houston, Texas, Whitestone REIT (NYSE:WSR) owns and operates community-centered retail properties in high-growth markets. It’s mostly concentrated in various compelling cities in its home state along with Arizona. For example, Whitestone has a presence in San Antonio, which is projected to grow by more than three million residents by 2050. Stated differently, the real estate investment trust (REIT) is located where the money will be.
Unsurprisingly, investors appreciate the long-term potential behind WSR. Over the past 52 weeks, shares gained over 25% of equity value. It’s also off to a solid start in the new year. Overall, analysts rate WSR a consensus strong buy with an average price target of $13.63. While modest, the high-side target lands at $15. Given the potential of its key regions, that could be the more realistic forecast.
Regarding passive income, Whitestone offers a forward yield of 3.74%. While a bit light compared to other REITs, WSR also enjoys the aforementioned growth narrative. Thus, the combination of growth and passive income makes it one of the monthly dividend stocks to buy.
Stag Industrial (STAG)
Headquartered in Boston, Massachusetts, Stag Industrial (NYSE:STAG) primarily invests in single-tenant industrial properties. Moreover, these properties play a significant role in supporting the logistics and distribution networks that facilitate e-commerce operations. Of course, that’s a significant factor to consider because of the sustained relevance of online retail transactions.
As data from the U.S. Census Bureau demonstrates, e-commerce sales as a total of all retail transactions slipped to 14.4% in the second quarter of 2022 after hitting an all-time high of 16.5% in Q2 2020. However, even with the cynical COVID-19 catalyst firmly in the rearview mirror, this metric started to rise. By Q3 of last year, the index hit 15.6%, confirming strong consumer demand for the convenience of e-commerce.
Therefore, STAG is well positioned. Overall, analysts peg shares a consensus moderate buy with a $41 price target. Regarding passive income, Stag offers a forward yield of 3.94%. It also enjoys six years of consecutive payout increases. Thus, it’s an intriguing idea for monthly dividend stocks.
Gladstone Land (LAND)
Founded in 1997, Gladstone Land (NASDAQ:LAND) is a REIT that owns farmland and leases it to farmers. It also offers cash purchases of agricultural land, with the offer to keep existing tenant-farmers in place or to find new farmers if needed. On its website, Gladstone boasts of its strong operating history and deep farming resources. As well, all of the REIT’s farms are presently 100% occupied.
Fundamentally, Gladstone plies its trade in one of America’s most important endeavors: ultimately to feed its people. Further, experts stated that last year, cropland values were anticipated to rise 8.1%. As well, ranchland values were projected to increase by 6.7%. That’s not really a surprise because let’s face it – they aren’t making any more new land.
However, investors haven’t really seen the value in LAND stock, sending it down sharply over the past year. Still, that could be a mistake given the solid revenue growth and lowly revenue multiple of 5.28X. As for passive income, Gladstone carries a forward yield of 4.12%. It does have a negative payout ratio but that’s likely due to the company reinvesting more money than it’s paying to shareholders.
Realty Income (O)
One of the most popular monthly dividend stocks, Realty Income (NYSE:O) is no stranger to the topic. Indeed, I’ll bet that if you search for articles about frequent passive income, Realty Income will be mentioned in 90% of them. Per its public profile, the REIT invests in free-standing, single-tenant commercial properties in the U.S., Spain, and the U.K.
Also, the company has registered a trademark for the phrase “The Monthly Dividend Company.” It’s hard to argue with the moniker. At the moment, the enterprise offers a forward yield of 5.73%. That’s resoundingly above the real estate sector’s average yield of 4.46%. Also, it sports 31 years of consecutive annual payouts. Even in troubling or ambiguous market cycles, Realty is the name you can trust.
Interestingly, though, you can pick up O stock on a relative discount, which is down double digits in the past 52 weeks. That seems a bit harsh given the solid revenue and EBITDA growth over the past three years. In addition, analysts assess Realty as one of the monthly dividend stocks to buy with an average $61.98 price target.
Gladstone Investment (GAIN)
Headquartered in McLean, Virginia, Gladstone Investment (NASDAQ:GAIN) is a business development company (BDC). Primarily, the enterprise invests in small and mid-sized businesses. Generally speaking, BDCs help enterprises grow during the initial stages of their development. As well, they can also help distressed companies regain their footing.
To be fair, the case for Gladstone is a bit tricky because of the tough economic circumstances that materialized in 2022 and 2023. Typically, BDCs perform better during bull markets because interest rates tend to be lower. In turn, this reduces the cost of capital, which can ultimately enhance their profitability. Still, with the economy avoiding a recession last year and hopes for a soft landing rising, Gladstone may become a beneficiary.
Within the past three months, no analyst has covered GAIN. Extending out to early November, two ratings came in – one hold, one buy. That said, speculative investors may be attracted to the passive income. Currently, the company levers a forward yield of 6.88%, well above the financial sector’s average yield of 3.18%.
If you can handle the risks, it could be an enticing candidate for monthly dividend stocks.
LTC Properties (LTC)
For the patient high-conviction investor, LTC Properties (NYSE:LTC) may be one of the most exciting monthly dividend stocks. Now, that comes with its positive and negative territories. As a REIT that invests in senior housing and healthcare properties, LTC doesn’t need to explain its relevance. With the aging baby boomer population likely to drive demand, longtime believers are confident in the upside narrative.
However, the market is also testing their patience. Over the past 52 weeks, LTC absorbed a sizable hit. Also, the company suffered annual revenue growth declines between 2020 and 2021. However, to counterbalance this pessimistic narrative, sales shot up in 2022 and it’s projected to do so again based on trailing-12-month (TTM) trends. Additionally, by 2030, all baby boomers will be age 65 or older. That’s almost an inevitable tailwind.
As for passive income, the company offers a robust forward yield of 7.47%. However, one factor to watch out for is that analysts only peg shares a consensus hold. Still, with a high-side target of $37, LTC could be an interesting idea among monthly dividend stocks.
EPR Properties (EPR)
Ranking among the more speculative ideas for monthly dividend stocks, investors will need high conviction to bet on EPR Properties (NYSE:EPR). Structured as a REIT, EPR focuses on entertainment, recreation, and education properties. During the post-pandemic revenge travel sentiments, the former two categories offered an attractive narrative. Still, with stubbornly elevated inflation and high borrowing costs, questions exist about the health of the consumer economy.
Given the undulations of EPR stock during the past 52 weeks, it’s tough to get a read on market sentiment. Also, reviewing its point-and-figure chart, EPR printed what’s known as a high pole warning. Basically, the demand that previously helped push prices higher could give way to supply pressure. At the same time, I don’t think it’s proper to outright ignore the resilience of the consumer.
Also, by avoiding a recession last year, that in and of itself represents a major victory. If we could somehow materialize a soft landing, consumer sentiment may rebound vigorously. While you’re waiting for that narrative, EPR offers an incredibly generous 7.69% forward dividend yield.
On the date of publication, Josh Enomoto 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.