The Best Monthly Dividend Stocks

Realty Income Corp (NYSE:O)

Realty Income Corp (NYSE:O) is a real estate company with the primary business objective of generating dependable monthly cash dividends from a consistent and predictable level of cash flow from operations. Realty Income was founded by William E. Clark, Jr. and Evelyn Joan Clark in 1969 and is headquartered in San Diego, CA.

Realty Income Corp (NYSE:O) is one of the oldest REITs and one of the most successful; so successful that it has almost a cult following. Like all the stocks highlighted in this article, Realty Income is a monthly dividend stock.  In addition, it is known for raising that dividend at least every quarter. The success of the this REIT has resulted in the share price being pushed up to the point where I sold out my holdings. I did not sell because Realty Income’s performance has dropped but because I had a 38% gain in the stock and could reinvest the proceeds for a higher return. When the market comes to its senses again and Realty Income’s valuation is fair again, I’ll reinvest in the company. But at a yield of 3.6%, Realty Income is overvalued. The company has a solid balance sheet and carries a BBB+ credit rating; one of the highest in the REIT sector. I’ve listed the company as green in the spreadsheet but recommend that investors wait until a more favorable valuation is offered for Realty Income.

LTC Properties Inc (NYSE:LTC)

LTC Properties Inc (NYSE:LTC) operates as an internally managed REIT that invests primarily in the long-term care sector of the health care industry through the origination of first mortgage loans and acquisition of properties that are leased to long-term care providers. Its primary senior housing and long term healthcare property types include Skilled Nursing, Assisted Living Properties and Independent Living Properties. LTC Properties was founded by Andre C. Dimitriadis on May 12, 1992 and is headquartered in Westlake Village, CA.

LTC Properties Inc (NYSE:LTC) is a mid cap REIT with a history of conservative growth. Though is does not have a credit rating from any of the rating agencies due to its size, LTC has a solid balance sheet and a reasonable dividend payout ratio of 80% of FFO. This is another very solid REIT but, like Realty Income, suffers currently from over valuation. I recommend that investors wait for a lower valuation to invest in LTC.

Final Thoughts

The monthly dividend stocks are primarily REITs and BDCs with a few other companies thrown into the mix. For those investors looking for decent yielding stocks that provide a monthly income stream, those companies highlighted in green in the spreadsheet above are likely your best option.

Of the monthly dividend stocks analyzed in this article, only Realty Income has a long enough dividend history to be eligible for the Sure Dividend database based on The 8 Rules of Dividend Investing.

Disclosure: This article was originally published on Sure Dividend by Dirk S. Leach.