3 Stocks That Will Pay You a Check Every Month

Most companies pay dividends quarterly, semi-annually, or annually. However, these payments may be too infrequent and infrequent for investors who want to retire or live off dividend income.

For these investors, the option of paying monthly dividends may be more attractive. Real estate income (ABOUT 0.58%), LTC Real Estate (LTC 0.20%)AND Gladstone Investment (ACHIEVE 1.33%) all provide monthly income with minimal disruption.

1. Income from real estate

Realty Income is one of the world’s largest real estate investment trusts (REITs). REITs buy multiple properties, rent them out, and share the rental income with their investors. U.S. REITs are also required to pay out at least 90% of their taxable income as dividends to maintain a favorable tax rate.

Realty Income owns approximately 15,450 properties worldwide, and its anchor tenants include fast-growing retailers such as Walgreens Shoe Alliance7-Eleven, Dollar General, Dollar TreeAND Walmart. Some of these tenants have faced difficult macroeconomic headwinds, but Realty Income has consistently maintained occupancy rates above 96% over the past three decades.

The company has paid consecutive monthly dividends since its founding in 1969, and has increased its payout 126 times since its initial public offering in 1994. It currently pays a monthly dividend of $0.2625 per share, which translates to an annualized yield of 5.2%. It still looks cheap at 15 times adjusted funds from operations per share, which is comparable to cash flow for a REIT.

Like many REITs, Realty Income valuations have been hurt by high interest rates over the past two years. However, with interest rates set to fall, now could be a great time to invest in this evergreen income stock to generate stable monthly dividends.

2. LTC Properties

LTC Properties is another REIT. Unlike Realty Income, however, LTC primarily invests in senior and healthcare properties across the United States. Both of these markets are growing as the U.S. population ages. Its current portfolio includes 115 assisted living facilities, 78 nursing facilities, and five other types of facilities.

LTC’s focus on senior living naturally shields it from economic downturns and makes it a more conservative player than retail- or commercial-focused REITs. It maintained stable occupancy rates of over 83% and 75% in its assisted living and skilled nursing facilities in the first quarter of 2024.

LTC pays a monthly dividend of $0.19, which equates to a forward annual yield of 6.4%, and trades at just 12 times forward earnings. This high yield and low valuation should limit LTC’s downside potential, but it likely won’t attract too many buyers until interest rates finally drop and make it easier for the company to buy new properties. Still, it’s still a safe place to park cash, get a higher yield than most CDs and T-bills, and capitalize on the growing needs of an aging population.

3. Gladstone Investment

Gladstone Investment is a business development company (BDC) that primarily lends to smaller, mid-sized, and mature companies. Like REITs, BDCs are required to distribute at least 90% of their taxable income to their investors in the form of dividends. They must also invest 70% of their assets in U.S. companies valued at less than $250 million.

Gladstone typically invests up to $75 million in debt and equity per transaction. It typically seeks companies with experienced management teams, proven business models, stable customer relationships and annual adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $4 million to $15 million. Its portfolio consists of two dozen companies in the consumer services, consumer products and manufacturing sectors.

Gladstone pays a monthly dividend of $0.08 per share, which translates to an annualized yield of 7.6%. At less than $13, the company is trading at a discount to its $13.43 net assets per share (as of the end of Q1 2024) and 11 times its future earnings. The company is trading at such low valuations because high interest rates make it difficult to offer loans at favorable rates. However, if interest rates fall, the company’s profitability should improve and allow for higher dividends. For now, this is a fairly safe way to collect a high monthly payment until the macroeconomic environment stabilizes.