In this article, we will take a look at some of the best dividend stocks that pay monthly dividends.
The majority of dividend-paying stocks distribute payouts on a quarterly basis, or every three months. However, companies that provide dividends on a monthly schedule are much less common. Those that do typically prioritize rewarding shareholders and offer a consistent income stream.
Real estate investment trusts (REITs) are among the few that pay monthly dividends. These investment vehicles trade like stocks, allowing investors to gain exposure to large-scale commercial real estate projects. To maintain their tax-advantaged status, REITs are required to distribute at least 90% of their taxable income to shareholders, which exempts them from corporate income tax. In general, REITs provide attractive yields, portfolio diversification, and liquidity while also serving as a defensive investment option that can remain resilient during economic downturns.
Regardless of payout frequency, dividend stocks have remained a popular choice among investors. In 2024, dividends remained strong, even though the Dividend Aristocrats Index underperformed the broader market. Throughout the year, US companies consistently maintained or increased their dividend distributions. In addition, several leading tech firms initiated dividend payments, reinforcing the idea that businesses can prioritize both growth and shareholder returns.
By the end of September 2024, roughly 80% of companies in the broader market were paying dividends—a figure that has remained relatively stable over the past decade. Notably, the technology sector accounted for nearly 24% of dividend-paying firms, up from just 13% a decade ago. Other sectors, including healthcare and industrials, also saw an increase in the number of companies offering dividends. This wider distribution of dividend-paying firms has provided income-focused investors with greater access to high-growth and innovative businesses. Given these trends, analysts remain optimistic about dividend stock performance heading into 2025.
Also read: 10 Best Bank Dividend Stocks To Buy Right Now
Historical data consistently indicates that dividend-paying stocks have outperformed other asset classes throughout different market cycles. According to a report from T. Rowe Price, dividends have contributed nearly one-third of total equity returns for US stocks since 1926. Between 1980 and 2019—a period characterized by falling interest rates—dividends accounted for 75% of the broader market’s returns.
The report also emphasized that dividends become particularly valuable in low-interest-rate environments, providing a reliable income stream when other fixed-income investments are less attractive. Once companies initiate dividend payments, they rarely discontinue them, and many tend to increase their payouts over time. Offering dividends can also make a stock more attractive to investors, potentially driving up its value.
Analysts point out that, historically, dividend growth has been closely tied to earnings expansion. With strong earnings recorded last year, expectations for 2025 are even more optimistic. Goldman Sachs projects an 11% rise in earnings per share for the year, improving from an estimated 8% increase in 2024. As a result, dividends are expected to grow by 7%, compared to a 6% uptick in the previous year.
Ohsung Kwon, a US equity strategist at BofA Securities, holds an even more bullish view, predicting a 12% increase in dividends this year, driven by accelerating earnings growth. From 1936 to 2012, dividends made up roughly 40% of the market’s total return. However, over the past decade, their contribution has dropped to just 16%, according to a late 2024 research note from BofA Securities. Looking ahead, Kwon expects dividends to play a more substantial role in total returns compared to the previous ten years. Given this, we will take a look at some of the best dividend stocks that pay monthly dividends.
Photo by nick chong on Unsplash
Our Methodology:
For this list, we reviewed a list of companies providing monthly dividends to their shareholders. Among these, we specifically chose businesses with robust dividend practices, consistently maintaining their payouts across multiple years. The majority of these selected companies operate within the Real Estate Investment Trust (REIT) sector, as they are required to allocate 90% of their income towards dividends. From that list, we picked 12 stocks with the highest number of hedge fund investors, using Insider Monkey’s Q3 2024 database of 900 hedge funds and their holdings.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
12. Gladstone Land Corporation (NASDAQ:LAND)
Number of Hedge Fund Holders: 5
Gladstone Land Corporation (NASDAQ:LAND) is an American real estate investment trust company, based in Virginia. The company owns and acquires farmlands and farm-related products. It prioritizes fresh produce farms as they pose lower risks compared to commodity crops. These farms typically have more reliable water access, face less exposure to price fluctuations, rely less on government subsidies and tariffs, incur lower storage costs, and generate higher rental income. Since the start of 2025, the stock has surged by over 8%.
Gladstone Land Corporation (NASDAQ:LAND) delivered strong performance in the third quarter of 2024, driven by increased property values and rental income from its annual row crop farms in California and Florida. However, some permanent crop farms in the western regions faced challenges due to lower crop prices, higher input costs, and water availability concerns. To address these issues, the company implemented a new leasing strategy, providing tenants with a cash allowance to cover expenses in exchange for a larger share of gross crop proceeds. Although designed as a temporary measure, this approach is seen as the most effective solution, given the farms’ history of strong yields, reliable crop insurance, and improving crop prices.
On January 16, Gladstone Land Corporation (NASDAQ:LAND) declared a monthly dividend of $0.0467 per share, which was in line with its previous dividend. The company has consistently returned value to shareholders, distributing monthly dividends for 141 consecutive months. Over the past 39 years, the company has increased its payouts 35 times, demonstrating a strong commitment to dividend growth. With a dividend yield of 4.80%, as of February 13, LAND is one of the best dividend stocks on our list.
11. Main Street Capital Corporation (NYSE:MAIN)
Number of Hedge Fund Holders: 7
Main Street Capital Corporation (NYSE:MAIN) is an American business development company that provides customized debt and equity financing to lower-middle-market companies and debt capital to middle-market companies. The stock has delivered strong returns in the past 12 months, surging by over 37%. The company maintains strong cost efficiency, reflected in its annualized Operating Expenses to Assets Ratio of 1.3%. This metric, which tracks non-interest operating costs as a percentage of average total assets, remained steady both for the quarter and the twelve-month period ending September 30, 2024.
In the third quarter of 2024, Main Street Capital Corporation (NYSE:MAIN) recorded $136.8 million in total investment income, marking an 11% increase from the previous year. It allocated $51.6 million toward its lower middle market (LMM) portfolio, which included an $11.2 million investment in a newly added LMM portfolio company. Meanwhile, Main Street Capital maintained a strong liquidity position, with cash and cash equivalents growing to $84.4 million by quarter-end, up from $60 million in December 2023.
Main Street Capital Corporation (NYSE:MAIN) currently offers a monthly dividend of $0.245 per share and has a dividend yield of 4.93%, as of February 13. The company has consistently rewarded shareholders with supplemental payouts. In its third-quarter earnings report, the company announced a $0.30 per share supplemental dividend, marking the thirteenth consecutive quarter of additional distributions. This is alongside eight increases to its regular monthly dividends since the fourth quarter of 2021, reinforcing its commitment to steady dividend growth.
10. Ellington Financial Inc. (NYSE:EFC)
Number of Hedge Fund Holders: 9
Ellington Financial Inc. (NYSE:EFC) is a Connecticut-based specialty finance company that acquires and manages a range of financial assets, including those related to mortgages, consumers, corporations, and other financial sectors. In the third quarter of 2024, the company strengthened its investment portfolio by utilizing its solid balance sheet to expand its high-yield loan assets. The company experienced a 26% growth across various loan categories, including non-QM loans, residential transition loans, commercial mortgage bridge loans, HELOCs, and closed-end second-lien loans. This expansion resulted in a modest increase in leverage, while the company scaled back its Agency portfolio and set aside capital for future investment opportunities.
Ellington Financial Inc. (NYSE:EFC)’s aims to generate attractive, risk-adjusted returns for its shareholders by investing in opportunities that offer a balanced reward relative to their risks. The company maintained a strong cash position, reinforcing its ability to sustain steady dividend payments. By the end of the quarter, cash and cash equivalents totaled nearly $218 million, rising from $198.5 million at the end of June 2024. In addition, total assets expanded to approximately $16 billion, up from $15.3 billion in the same period the previous year.
On February 10, Ellington Financial Inc. (NYSE:EFC) declared a monthly dividend of $0.13 per share, which fell in line with its previous dividend. The company has maintained its dividends for 15 consecutive years, which makes EFC one of the best dividend stocks on our list. The stock supports an attractive dividend yield of 12.11%, as of February 13.