2 Monthly Dividend Stocks for Steady Cash All Year Round

Most companies typically pay dividends every quarter, but a few exceptional stocks offer monthly payouts. These monthly dividend stocks provide a consistent stream of cash, which can be especially useful for boosting your income and meeting expenses.

Another key benefit of monthly dividends is the ability to reinvest more often. By reinvesting those dividends into additional shares, you can take advantage of compounding. Over time, this reinvestment strategy can significantly grow your capital as each new share increases your potential future earnings.

Against this background, Main Street Capital Corporation (MAIN) and Realty Income (O) stand out for their solid monthly dividend payouts and attractive yields. Let’s examine the factors enabling these dividend stocks to generate steady cash all year round.

Main Street Capital Stock

Main Street Capital (MAIN) is a well-established investment firm specializing in customized debt and equity financing for lower middle market (LMM) companies and offering debt capital to middle market businesses. The company's focus on LMM investments and efficient operating structure provides a strong foundation for growth, allowing it to consistently pay monthly dividends.

Main Street’s investment strategy prioritizes capital preservation, while generating high recurring income and providing opportunities for capital appreciation. What sets Main Street apart is its investments' low correlation to broader debt and equity markets, which offers attractive risk-adjusted returns for investors. This means that Main Street’s portfolio tends to be more resilient to market fluctuations, making it an appealing option for those seeking stability.

The company has an impressive track record of dividend payments. Since Q4 2007, it has increased its monthly dividend payouts by 123%, from $0.33 per share to $0.745 per share in Q4 2024 (regular and supplementary). Even during challenging times, such as the 2008-2009 financial crisis and the COVID-19 pandemic, Main Street never reduced its regular monthly dividends. It has also paid out $6.34 per share in supplemental dividends since its 2007 IPO.

Looking ahead, Main Street’s multifaceted investment strategy will likely support dividend growth through various market cycles. Its LMM investment portfolio is well-diversified, consisting of secured debt and lower-cost equity investments. Additionally, the company’s private loan and middle market portfolios provide further diversification, enhancing income sources and complementing the LMM investments.

Further, Main Street’s internally managed structure provides operating leverage, consistently driving up distributable net investment income (DNII) per share, which ultimately boosts its payouts.

Main Street Capital stock currently offers a yield of over 8.20%, making it an attractive option for income-seeking investors. Analysts have given MAIN a “Moderate Buy” rating.

Realty Income Stock

As a real estate investment trust (REIT), Realty Income operates in diversified commercial real estate sectors in the U.S., the UK, and Europe. What truly sets Realty Income apart is its consistent monthly dividend payouts, which earned it the nickname “The Monthly Dividend Company.”

In its latest move, Realty Income raised its monthly dividend to $0.2635 per share, up from $0.2630. While this might seem like a slight increase, it’s important to note that this marks the company’s 127th dividend hike since it went public in 1994. Even more impressive, Realty Income has increased its dividend for the past 30 consecutive years and has declared 651 consecutive monthly dividends, establishing the company as a Dividend Aristocrat.

The new dividend amounts to an annual payout of $3.162 per share, reflecting a yield of about 5%.

The company’s payouts are supported by long-term leases on its properties, which provide a reliable revenue source to cover its distributions. Realty Income’s strong balance sheet and conservative capital structure gives the company flexibility in managing its portfolio, while its diverse range of properties ensures stability and growth.

The company has also expanded into promising areas like gaming and data centers, where long-term leases often come with annual rent increases. This diversification positions Realty Income for future growth, especially as the demand for data centers continues to rise.

Realty Income’s portfolio continues to perform exceptionally well. Occupancy rates reached 98.8% during the last reported quarter, up slightly from the previous quarter. The size and diversity of Realty Income’s global real estate portfolio, along with its consistent performance, have provided reliable revenue streams for decades.

O stock has a “Moderate Buy” consensus rating from Wall Street analysts. While it’s not the highest-rated stock, its dependability and consistent monthly dividend payouts make it an attractive option for income-focused investors.

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On the date of publication, Amit Singh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.