3 Monthly Dividend Stocks for Consistent Passive Income

Stocks to buy

While passive income offers an important cog in your portfolio, the enterprises that provide mostly do so on a quarterly basis, thus drawing intrigue for monthly dividend stocks. As the name suggests, these companies pay out every month as opposed to every three months. That has obvious advantages to the investor.

Primarily, if you depend on your dividends to provide a steady cash flow, monthly dividend stocks facilitate a timing benefit. Essentially, the payouts occur on the cycle of life. Whether you’re talking your rent, utilities or other membership obligations such as the cable bill (if you’re still on the cord), these expenses are due every month.

On a second note, generally speaking, money today is worth more than money tomorrow. Now, there may be some rare exceptions, such as when the Federal Reserve implements aggressively hawkish monetary policies. But as a rule of thumb, you want your money as soon as possible because of inflation.

And that also segues into the greater flexibility that frequent payouts empower. With that, below are monthly dividend stocks to consider.

Realty Income (O)

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For those seeking relevant monthly dividend stocks with high yields, Realty Income (NYSE:O) is difficult to pass up. A real estate investment trust (REIT) that invests in free-standing, single-tenant commercial properties in the U.S., Spain and the U.K., Realty Income focuses on big consumer brands such as popular pharmacies and convenient stores. Unless you anticipate such business models to go out of style, O stock should be a decently stable long-term play.

Let’s just take the U.S. pharmacy market as an example. According to Grand View Research, the segment reached a valuation of $527 billion in 2022. Further, experts project that the segment will expand at a compound annual growth rate (CAGR) of 3.67% from 2023 to 2030. At the culmination of the forecast period, the segment could be worth $708.9 billion.

Now, factor in other sectors that Realty aligns with and you get a picture of its relevance. If that’s not enough to convince you, consider its forward dividend yield of 5.31%. With 31 years of consecutive annual payouts, it’s one of the most trusted monthly dividend stocks.

EPR Properties (EPR)

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An intriguing idea for monthly dividend stocks if you’re bullish on the economy, EPR Properties (NYSE:EPR) previously carried the name Entertainment Properties Trust. While the branding has changed, the mission focus has not. Per its public profile, EPR invests in amusement parks, movie theaters, ski resorts, and other entertainment properties. Put another way, it specializes in experiences.

According to the company’s website, consumers care more about social events and experiences than they do stuff. I think that’s a reasonable statement. After all, part of this sentiment undergirded the revenge travel phenomenon. Also, some hard data supports the bull case for EPR stock.

From Mordor Intelligence, the U.S. amusement and theme park industry was projected to achieve a CAGR of 3.5% from 2020 to 2025. However, with the disruption of Covid-19, it’s possible that some pent-up demand may exist. Also, there are some pent-up savings from the 2023 high-interest-rate doldrums that exist.

What I’m saying is that EPR may benefit from a capital gains recovery. While you’re waiting, you can pick up that sweet forward yield of 6.91%.

LTC Properties (LTC)

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Easily one of the most relevant monthly dividend stocks, LTC Properties (NYSE:LTC) is a REIT focused on senior housing and healthcare. Its business operates via sale-leasebacks, mortgage financing, joint ventures and construction financing through preferred equity and bridge lending, among other mechanisms. Further, its portfolio is divided roughly 50/50 between senior housing and skilled nursing properties.

Fundamentally, the main catalyst for LTC centers on demographic realities. According to the U.S. Census Bureau, by 2030, all baby boomers will be age 65 or older. Of course, 2030 isn’t that far away at all. And while we’d like to think that we can live forever, the reality is that age catches up to every one of us. Moreover, zero guarantees exist as to whether we can live alone when that time comes.

So, the reality is that LTC commands relevance. It’s merely an inevitability. With that, its forward yield of 7.18% is attractive. Sure, it doesn’t have any unbroken streak of dividend increases going. However, that could be forgiven based on the underlying need.

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.

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