Investing in the stock market is a great way to build long-term wealth. However, with numerous approaches available, navigating the investing world can be overwhelming. One method that stands out for generating income is dividend investing.
Dividend stocks can provide investors with stable, reliable paychecks. Not only that, but these companies have consistently outperformed their non-dividend-paying peers over long periods of time.
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An extensive study by Hartford Funds found that dividend-paying stocks delivered an impressive annual return of 9.17% over a fifty-year period ending in 2023. Non-dividend payers returned 4.27% in comparison. Furthermore, dividend stocks are less volatile than their counterparts, making them an attractive choice for those seeking stability along with growth.
Many dividend-paying companies pay out their profits every quarter. However, for those who prefer more frequent payouts, some stocks pay monthly dividends, providing a more regular cash flow. If you’re considering diving into the world of dividend investing, here are three high-yield stocks that will pay you monthly.
Agree Real Estate (NYSE:ADC) owns and manages independently owned retail properties, including supermarkets, hardware stores, tire and auto service centers and dollar stores, to name a few.
The Real Estate Investing Trust (REIT) is a good dividend payer because it rents to high-quality tenants (nearly 70% are investment-grade rated) that could better weather the economic downturn. As of the third quarter, 99.6% of the properties were rented, with a weighted average remaining lease term of 7.9 years.
Some of Agree Realty’s largest tenants at the end of last year include Walmart, Tractor offer, Dollar general, Best buyAnd CFS. The company is also doing a good job of diversifying its customer base. No tenant represents more than 6.1% of the annual base rent.
The past few years have been tough for real estate operators as rising interest rates have pushed up their financing costs. Nevertheless, Agree Realty continues to grow steadily and build on its solid foundation. In 2024, the company invested $524.9 million in 144 properties, which should contribute to years of stable rental income.
Agree Realty has a strong balance sheet and its use of leverage is low compared to its peers. It also has a reasonable payout ratio, at 73% of adjusted funds from operations (FFO), which should give investors confidence that it can continue paying its monthly dividend.
With a track record of 53 years in the commercial real estate sector, Real estate income (NYSE:O) has consistently demonstrated strong cash flow generation, making it an attractive choice for those looking for reliable returns.
Realty Income has a diverse portfolio of more than 15,450 properties across the US, UK and Spain. With tenants such as Dollar General, 7-Eleven, Wal vegetables, FedExand CVS, investors can have confidence in the strength and reliability of its customer base and its ability to generate cash.
The core of Realty Income’s business is the use of triple-net leases. This structure means tenants are responsible for property taxes, maintenance and insurance, allowing Realty Income to offer lower rental rates while ensuring stable cash flow that results in a reliable, predictable income stream for income-oriented investors.
However, as with any investment, it is important to consider the risks. Realty Income’s focus on retail properties – which make up 91% of its portfolio – is something to keep an eye on. The REIT is addressing this risk by diversifying its customer base across sectors that could weather a recession.
Supermarkets represent 10.2% of annual rent, followed by convenience stores (9.4%) and dollar stores (6.6%). The largest tenant, Dollar General, accounts for just 3.4% of annual rent, reducing reliance on a single customer.
Realty Income offers an attractive mix of stability and growth potential with a well-diversified, resilient portfolio poised to generate consistent income for years to come.
Deer Industrial (NYSE: STAG) is a go-to in the fast-growing field of US industrial properties. The company has amassed a portfolio of buildings in 41 states, primarily warehouses and distribution centers.
Stag focuses on the flourishing industrial sector and has a varied range of tenants Amazon leads the way and contributes 3% to annual base rental income. Other top tenants include Soho Studio, Eastern Metal Supply, American Tire Distributors and Tempur Sealy International.
Since its public debut in 2011, Stag has gone from just 93 properties to 573 properties, establishing itself as a powerhouse in the US industrial real estate landscape. The strategic focus on warehousing and distribution centers has positioned the company at the forefront of the booming industry, poised for continued success.
Stag is well poised to benefit from promising long-term trends. A recent report from Grand View Research shows that the global warehousing and distribution market will grow 8% annually through 2030.
Since its initial public offering (IPO), Stag Industrial has proven to be a solid investment choice offering excellent growth. It has a reasonable payout ratio of 60% of FFO and is well equipped to continue supplying investors.
Consider the following before purchasing shares in Agree Realty:
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Courtney Carlsen has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Amazon, Best Buy, FedEx, Realty Income and Walmart. The Motley Fool recommends CVS Health, Stag Industrial and Tractor Supply. The Motley Fool has a disclosure policy.
Looking for passive income? These 3 high-yield dividend stocks will give you a check every month. was originally published by The Motley Fool
