5 Must-Know Stocks With Monthly Dividends

By Markets Fool.com

Income investors like dividend stocks for the regular payouts they provide, but they love stocks with monthly dividends because the payouts that monthly dividend stocks make match up well against their need for cash to pay living expenses. There are hundreds of dividend stocks that make monthly payouts, but below, we'll talk about five stocks with monthly dividends that you really ought to know better.

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1. STAG Industrial

STAG Industrial (NYSE: STAG) is a real estate investment trust that has a relatively simple way of doing business: It purchases industrial real estate and then seeks to lease out prime properties to single tenants with extremely long-term leases. STAG has worked hard to expand, and it has taken advantage of healthy conditions in the commercial real estate industry not only to pay solid dividends but also to produce significant share-price appreciation. The stock price has doubled over the past five years, and many investors see further upside ahead.

STAG has a current dividend yield of 6.2%, and the company has been making monthly dividend payments since Oct. 2013. Although STAG will mirror the health of the commercial real estate market, its success in reality depends more on the financial condition of its individual tenants, and that makes the REIT a general cyclical play on the overall economy.

2. Shaw Communications

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Canada's Shaw Communications (NYSE: SJR) is one of the largest telecommunications companies in the Great White North, serving more than 3.4 million customers with television, internet, home phone, and other telecom services. Until recently, the company also held substantial media holdings, but it said earlier this year that it would sell off its media division. Instead, Shaw is doubling down with more exposure to the wireless realm through its recent acquisition of Wind Mobile, and the company hopes that will help bolster growth.

Shaw has a much longer history of making monthly dividend payments that dates all the way back to April 2005, and its current yield is between 4% and 5%. Although its dividends haven't always gone up over that period, Shaw's payouts have been fairly stable. If the company can stem the loss of traditional landline subscribers, then Shaw has the potential to see its dividend keep growing again.

3. Enerplus

Staying in Canada, Enerplus (NYSE: ERF) is an oil and natural gas developer with assets both in Canada and in the U.S., with diversified assets across North America. The company has oil exposure in the Williston Basin in North Dakota, natural gas holdings in the Marcellus shale play, and Canadian assets in energy-rich areas of Alberta, Saskatchewan, and British Columbia. As you'd expect, the company got hit hard during the oil bust in late 2014 and 2015, but it has recovered some of its lost ground so far this year.

Enerplus has paid monthly dividends since late 2000, although it has seen huge swings in the amount of those payouts over time. If energy prices keep recovering as they have lately, then Enerplus could easily regain even more of the ground that its stock has lost over the past couple of years.

4. Student Transportation

Another way to get monthly dividend income is through school-bus operator Student Transportation (NASDAQ: STB). The Canadian company provides a variety of transportation services for students and schools, including managed and contracted school bus services, special-needs transportation, and charter services as necessary. Student Transportation also hold non-operating interests in certain oil and gas properties, giving it exposure to the health of the energy market as well.

Student Transportation's history of monthly payouts dates back to 2012. The company's dividend amount has eased downward over the past several years, but the stock still provides an above-average yield of more than 7% to investors. That hasn't left much room for capital appreciation, but Student Transportation has bounced back from its 2015 lows and appears poised to keep moving higher.

5. Realty Income

Finally, one of the most famous monthly dividend stocks is Realty Income (NYSE: O). The real estate investment trust takes pride in calling itself the Monthly Dividend Company, having made 554 consecutive monthly dividends and making 76 consecutive quarterly increases to those monthly payouts. With more than 4,600 properties under lease agreements and almost 250 commercial tenants spanning nearly 50 different industries, Realty Income offers a diversified play on real estate.

Realty Income's yield is solid, currently paying 4%. Yet even more impressive is its overall average annual total return, which is close to 18% during the 22-year period between 1994 and today. Realty Income shows how dividends and capital gain don't have to be mutually exclusive, and the company has plenty of potential for future success.

Dividends are great, but monthly dividends can be exactly what you need. If stocks with monthly dividends interest you, take a closer look at these five stocks and see if they offer everything you want in an investment.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Stag Industrial. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.