Whether you’re a new or experienced investor, it’s important to understand dividends and the frequency in which they’re distributed. Monthly dividends, in particular, come with several advantages for investors. Read on to learn more about monthly dividend stocks, the benefits they provide, and the various stocks that offer this payout frequency.
What Are Monthly Dividends?
Monthly dividends are profit distributions made by a company and distributed to shareholders via shares in the company each month. As opposed to dividends that are paid out quarterly or semi-annually, monthly dividends are distributed once per month to shareholders.
Benefits of Monthly Dividends
Investing in stock with monthly dividends comes with several advantages for investors. Here are some of the benefits you receive with monthly dividends:
- Steady income: Though all dividends can offer reliable income, monthly dividends feature more frequent payouts. This gives the company with the stock more chances to earn your trust through consistent and reliable payments.
- Dividend reinvestment: When you receive monthly dividends, you also get the option of dividend reinvestment. Dividend reinvestment refers to the process of using the dividend funds you received to purchase more shares of stock.
- Higher yields: Monthly dividends often mean higher yields. This is particularly beneficial for income investors. High-dividend-yield stocks offer a steady source of income and desirable long-term returns.
- Affording personal expenses: Since most personal expenses like rent and utilities are paid monthly, having a monthly dividend is beneficial for investors who rely on this income to pay their bills and expenses.
Stocks that Pay Monthly Dividends
Though monthly dividend payouts aren’t the most common when it comes to the stock market, there are still several options to choose from. Here are some companies with stocks that offer monthly dividends for investors:
- Shaw Communications: Founded in 1966, Shaw Communications is a Canadian telecom stock that boasts an impressive growth rate. It provides both high yield and monthly payments for investors.
- Realty Income: This commercial real estate investment trust is a popular choice for investors looking for a monthly dividend. With properties for over 300 companies that span over 50 different industries, it’s a safe option given it can withstand the market despite downturns in a particular sector.
- Main Street Capital Corporation: Main Street Capital is a publicly-traded private equity firm that serves both lower middle-market and middle-market companies. While it offers equity and debt financing to lower middle-market companies making between $10 million and $150 million, it also offers debt financing to middle-market companies making between $150 million and $1.5 billion.
- Apple Hospitality REIT: Apple Hospitality is a real estate investment trust (REIT) that works with hotel brands like Hilton and Marriott. It offers both a high yield and monthly dividend payouts for investors. It’s also a leader in its industry with a diverse real estate portfolio and geographic diversification.
Having this knowledge regarding monthly dividends can help you make a more informed decision moving forward. Consider if the benefits of this payout are worthwhile, and if they are, start the investment process today.