are there stocks that pay monthly dividends? Guide

Monthly dividend stocks

Are there stocks that pay monthly dividends? Yes — and this article explains what monthly dividend payers are, which security types most commonly distribute monthly, how to evaluate them, and how investors can use them in income planning. Read on for practical screening tips, representative examples, tax and risk considerations, and where to verify current payment schedules.

Introduction — what the question means and what you’ll learn

The phrase "are there stocks that pay monthly dividends" asks whether publicly traded securities distribute cash on a monthly schedule instead of the more common quarterly cadence. This guide treats that question in the U.S. equities context and covers stocks, REITs, BDCs, royalty/royalty trusts, closed‑end funds (CEFs) and some ETFs that choose monthly payout schedules. You’ll learn why issuers pay monthly, how to assess sustainability, the main pros and cons, and how to find and verify monthly payers.

As of June 2024, according to sources that compile monthly‑payer lists (examples include StockAnalysis, The Motley Fool, and bankrate compilations), monthly payers are a minority of issuers but are concentrated in income‑oriented sectors such as real estate and financial‑lending vehicles.

Overview and prevalence

Most publicly traded corporations distribute dividends quarterly. Still, a meaningful subset of income‑focused securities use monthly payouts to match cash flows and investor demand for steady income. In order of prevalence, the sectors and security types that most often pay monthly are:

• Real Estate Investment Trusts (REITs), especially net‑lease and some equity REITs.
• Mortgage REITs (mREITs) that pass through interest income monthly.
• Business Development Companies (BDCs) that lend to middle‑market firms.
• Royalty companies and royalty/royalty trusts that collect predictable monthly royalties.
• Closed‑end funds (CEFs) and some ETFs that distribute aggregated income monthly.
• A small set of specialty corporates and financial firms.

Monthly schedules help issuers match frequent cash receipts (rent, interest, royalties) to distributions. They also attract investors who value predictable, frequent cash flows for budgeting or cash‑flow layering.

Security types that commonly pay monthly

Real Estate Investment Trusts (REITs)

REITs own and operate real estate assets (retail, industrial, office, single‑tenant net‑lease, etc.) and generally must distribute a large portion of taxable income to maintain tax advantages. Many equity REITs choose monthly distributions because lease payments and tenant rents are often collected monthly. Monthly payouts can be especially common among net‑lease REITs and single‑tenant landlords where cash collections are stable.

REITs are often measured by metrics specific to real estate rather than simple earnings per share. That makes it important to look beyond headline yield to distribution coverage metrics.

Business Development Companies (BDCs)

BDCs are closed‑end investment companies that primarily lend to or invest in small and middle‑market private companies. They are required to distribute most of their taxable income and commonly adopt monthly payout policies to provide steady income to shareholders. BDC distributions are typically financed from interest and fee income; coverage is therefore sensitive to loan performance and portfolio credit quality.

Mortgage REITs and royalty/royalty trusts

Mortgage REITs earn interest by investing in mortgage‑backed securities and other credit instruments. Because mortgage interest and related payments frequently occur monthly, many mREITs distribute monthly. However, mREIT payouts are highly sensitive to interest‑rate movements and financing costs.

Royalty companies and royalty trusts (for example, certain energy or media royalty entities) collect royalties on production or sales and sometimes distribute those cash flows monthly when receipts are predictable. Payouts depend on production volumes, commodity prices, or usage metrics.

Closed‑End Funds (CEFs) and some Exchange‑Traded Funds (ETFs)

CEFs and some ETFs can smooth irregular income by aggregating cash flows from many holdings and declaring monthly distributions. Funds choose distribution policies based on investor demand and cash‑flow management, and monthly distributions are common among income‑oriented funds that seek to provide a steady check for investors.

CEFs may include return‑of‑capital (ROC) components or realized gains in their monthly distributions; the composition should be checked in fund reports.

Other corporate issuers

A small number of operating companies (specialty finance firms, small caps, or structured finance issuers) elect to pay monthly dividends. Corporate monthly dividends are rarer than fund or REIT monthly payments, and investors should confirm the company’s declarations and sustainability measures.

How monthly dividend payments work

Dividends and distributions follow a standard timeline of corporate actions. Monthly payers follow the same steps more frequently:

• Declaration date: The issuer’s board authorizes the distribution and announces the amount and record/payable dates.
• Ex‑dividend date: The date on or after which a buyer of the security will not receive the upcoming distribution.
• Record date: Shareholders of record receive the distribution.
• Payable date: The date distribution funds are transferred.

Monthly schedules simply shorten the cadence between each set of events. Investors should track payable and ex‑dividend dates each month. Monthly distributions can be regular recurring payments or, in some cases, include supplemental/special distributions; verify whether a monthly payout is a stable policy or a temporary step.

Notable examples (illustrative)

Representative examples of monthly payers (selected from lists compiled by financial publishers; verify current schedules before trading):

• Realty Income (ticker example) — often referenced as a stable monthly net‑lease REIT.
• Agree Realty (ADC) — another net‑lease REIT that historically paid monthly.
• Main Street Capital (MAIN) — a BDC known for monthly distributions.
• STAG Industrial (STAG) — an industrial REIT that has used monthly payouts.
• EPR Properties (EPR) — specialty‑asset REIT with monthly distributions in many periods.
• AGNC Investment (an example mortgage REIT) — historically has used monthly distributions.
• Sample ETFs/CEFs — some income ETFs/CEFs (such as covered‑call or high‑dividend funds) declare monthly distributions.

As of June 2024, sources that maintain monthly‑payer lists reported multiple REITs, BDCs and funds offering monthly distributions, but individual tickers and payment policies change over time and should be verified via issuer investor relations.

Note: the above tickers are illustrative. Check each issuer’s investor relations page for the most recent declaration and distribution composition.

Metrics and analysis specific to monthly dividend investments

Evaluating monthly payers requires attention to both general dividend metrics and security‑type‑specific measures.

Yield and payout ratio

• Headline yield: Annualized distribution divided by share price. Monthly payers annualize each monthly payment to compute an indicated yield.
• Payout ratio: For corporations, the ratio of distributions to reported earnings or adjusted cash flow. Very high payout ratios can indicate less sustainable distributions.

High yield alone doesn’t guarantee a good investment; always weigh yield against coverage and business fundamentals.

REIT/BDCs‑specific metrics (FFO, AFFO, NII)

• Funds From Operations (FFO): A common REIT performance measure that adjusts net income for depreciation and gains/losses on asset sales. FFO provides a clearer view of operating cash available for distributions.
• Adjusted FFO (AFFO): Further adjusts FFO for recurring capital expenditures and other maintenance items—often considered a better proxy for distributable cash.
• Net Investment Income (NII): For BDCs, NII reflects interest income minus expenses and is the key coverage metric for distributions.

Always compare distributions to FFO/AFFO/NII to assess coverage rather than relying solely on accounting earnings.

Coverage and cash flow stability

Stable monthly payers generally show consistent distributable cash flow. Key coverage indicators include:

• Consistent FFO/AFFO for REITs.
• High NII relative to declared distributions for BDCs.
• Low percentage of distributions funded by return of capital in funds.

Look for diversity across tenants/borrowers, lease terms, and geographic exposure to reduce concentration risk.

Leverage and balance‑sheet health

Leverage amplifies returns but increases distribution risk. Important balance‑sheet indicators:

• Debt to EBITDA, debt to gross assets, or debt to equity ratios (for REITs and corporates).
• Interest coverage and cost of financing (for mortgage REITs and BDCs that rely on short‑term funding).
• Liquidity buffers and covenant headroom.

Mortgage REITs and highly leveraged BDCs are especially vulnerable to rising rates and funding squeezes that can compress net interest margins and pressure distributions.

Pros and cons of monthly dividend payers

Benefits:

• Smoother cash flow: Monthly checks help with budgeting and income layering.
• Faster compounding: Reinvested monthly dividends compound sooner than quarterly reinvestment.

Drawbacks:

• Fewer issuers: Monthly payers are concentrated in specific sectors, limiting diversification choices.
• Yield traps: Some very high yields reflect stressed business models or unsustainable payouts.
• Interest‑rate sensitivity: Mortgage REITs and BDCs can be highly sensitive to rate movements and funding costs.

Tax and accounting considerations

Taxes depend on the issuer and distribution composition:

• Qualified dividends vs ordinary income: Regular corporate dividends may be qualified (lower tax rate) if holding‑period tests are met. However, many REIT and BDC distributions are taxed as ordinary income or return of capital.
• REIT/BDC distributions: Often reported on Form 1099‑DIV as ordinary income or return of capital; investors should check issuer tax reporting each year.
• Fund distribution composition: CEF/ETF monthly distributions can include interest, dividends, capital gains and return of capital; the fund’s tax reporting and distribution breakdown matter for after‑tax yield.

Always consult tax guidance for your jurisdiction. This guide does not provide tax advice.

Portfolio construction and strategies

Monthly payers are useful building blocks for income strategies. Common approaches:

• Monthly cash‑flow ladder: Combine multiple monthly payers (from different sectors) to create a predictable monthly cash stream.
• Blend with quarterly payers: Mix monthly payers with high‑quality quarterly payers to increase diversification.
• Use funds for convenience: Income ETFs/CEFs that pay monthly offer diversification, but check distribution composition and leverage.
• DRIP considerations: Dividend reinvestment plans (DRIPs) can compound monthly payouts faster. Confirm whether your broker or platform supports monthly DRIP settlement for each security.

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Risks and red flags

Watch for these signs that a monthly payout may be at risk:

• Very high yields with weak coverage metrics (FFO/AFFO or NII below distributions).
• Frequent special/supplemental distributions that mask core coverage weaknesses.
• Heavy reliance on leverage with compressed interest coverage.
• Business stress indicators such as rising tenant vacancies for REITs or increasing non‑performing loans for BDCs.
• Fund distributions with large return‑of‑capital components that erode NAV over time.

Sectors have unique risk drivers: mortgage REITs respond rapidly to rate changes; BDCs depend on credit cycles; royalty trusts depend on commodity prices or usage.

How to find and screen monthly dividend stocks

Practical steps to identify monthly payers:

1. Use specialized screeners and curated lists: Financial publishers and screening services maintain monthly‑payer lists. (Examples of sources that maintain lists include StockAnalysis, The Motley Fool, SoFi, Bankrate and SureDividend.)
2. Filter by security type: Search specifically for REITs, BDCs, CEFs and ETFs with monthly distribution policies.
3. Verify payment history: Check issuer investor relations pages and fund distribution histories to confirm month‑by‑month payments over multiple periods.
4. Check composition and coverage metrics: For REITs/BDCs check FFO/AFFO/NII coverage; for funds check distribution sources and leverage.
5. Review tax reporting: Verify how distributions are taxed (ordinary income vs qualified dividends vs ROC).

As a reminder, payment frequencies and yields change; always verify with issuer filings or fund provider distribution schedules before investing.

Monthly distributions from funds vs. direct monthly dividend stocks

Key differences:

• Funds (CEFs/ETFs) can generate monthly distributions by pooling cash flows from many holdings. Their monthly check may include interest, dividends, capital gains and return of capital and can be influenced by a fund’s distribution policy and realized gains/losses.
• Single companies that declare monthly dividends are directly responsible for each monthly declaration; the board must authorize each payment. Companies that reliably declare monthly dividends often have matching monthly cash receipts.

Investigate whether a fund’s monthly distribution is primarily income or includes ROC, because ROC reduces a fund’s NAV and has different tax implications.

Frequently asked questions (FAQ)

Q: Are monthly dividends better than quarterly dividends?

A: "Better" depends on your needs. Monthly dividends offer smoother cash flow and potentially faster compounding if reinvested. Quarterly dividends are more common and offer a broader selection of issuers. Neither cadence guarantees total return or safety.

Q: Can monthly dividends be cut?

A: Yes. Any dividend or distribution can be reduced or suspended if cash flow or balance‑sheet conditions deteriorate.

Q: Do dividends differ between sectors?

A: Yes. REITs and BDCs tend to have higher reported yields but different tax profiles and payout mechanics. Mortgage REITs are sensitive to interest rates; equity REITs are tied to rent collections and occupancy.

Q: Are fund distributions monthly even if underlying stocks pay quarterly?

A: Yes. Funds can aggregate cash from holdings and declare monthly distributions regardless of each holding’s cadence.

Q: How can I verify current monthly payment schedules?

A: Check issuer investor relations pages, fund provider distribution calendars and credible screening services. Confirm the most recent declarations and the distribution breakdown.

Historical performance and considerations

Historically, monthly payers as a group do not uniformly outperform the broader market. Total return depends on income, dividend growth, capital appreciation and sector cycles. Income‑focused sectors can lag during rate‑rising environments (e.g., mortgage REITs) or during credit downturns (BDCs). Conversely, stable net‑lease REITs have at times produced competitive total returns with attractive income for long‑term investors.

Analyses from dividend‑focused publishers show varied outcomes: some monthly‑paying REITs and funds have been durable income producers, while others experienced dividend cuts tied to underlying business stress. Use yield plus coverage and balance‑sheet health as your evaluation framework.

References and further reading

As of June 2024, lists and guides compiled by financial publishers provide updated rosters of monthly payers. For current, authoritative details, consult issuer investor relations pages, fund provider distribution schedules and reputable screening services. Examples of the types of sources that maintain monthly‑payer information include StockAnalysis, The Motley Fool, SoFi, NerdWallet, Bankrate, SureDividend and fund provider pages such as iShares. Verify any ticker or payout schedule against primary filings.

External data and reporting notes

• As of June 2024, according to StockAnalysis and The Motley Fool compilations, several dozen REITs, BDCs and funds historically reported monthly payouts; the exact list fluctuates with corporate decisions and fund policy changes.
• When checking live data, look for up‑to‑date metrics such as market capitalization, average daily trading volume, and the issuer’s most recent distribution coverage statement. These items are typically disclosed in quarterly reports and investor presentations.

Note: This article is informational. It is not investment advice. Always verify current distribution policies and consult professionals for personal tax treatment.

How to verify current payment schedules and data

1. Issuer investor relations: Check the monthly distribution history and board declarations.
2. Fund provider distribution calendars and monthly distribution histories for CEFs/ETFs.
3. Screening services: Use filters for distribution frequency and payout type.
4. Financial statements: Review recent quarterly and annual reports for FFO/AFFO and NII disclosures.

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Editorial notes for updates

Payment frequencies, yields, and coverage metrics change over time. Editors should review and refresh this article quarterly and confirm all example tickers continue to pay monthly and that cited metrics remain current.

Practical checklist before investing in a monthly payer

• Confirm that the security currently declares monthly distributions.
• Check distribution history for at least the past 12 months.
• Review coverage metrics (FFO/AFFO for REITs, NII for BDCs).
• Evaluate leverage and interest‑rate sensitivity.
• Check the distribution composition for funds (income vs ROC).
• Review tax characterization of distributions.
• Confirm liquidity and average daily volume for execution considerations.

Final thoughts and next steps

If your priority is a steady monthly income stream, monthly dividend payers — primarily REITs, BDCs, mortgage REITs, royalty trusts, and income funds — can help build a consistent payout schedule. Always verify current distributions, check coverage and balance‑sheet health, and maintain portfolio diversification.

Explore Bitget’s educational resources and platform tools to track equities and income holdings. For custody of digital assets, Bitget Wallet provides secure management options. To implement a monthly‑income plan, combine careful screening with regular monitoring and periodic portfolio rebalancing.

Further exploration: use dedicated screeners and issuer filings to compile an up‑to‑date watchlist of monthly payers, and review the latest fund distribution reports for composition details.

As of June 2024, according to lists compiled by dividend publishing services and screening sites, monthly payers are concentrated in REITs, BDCs and certain funds. Always validate current payout schedules via official issuer releases.