3 Stocks That Pay You Each Month

By Dan Caplinger Markets Fool.com

Income investors love dividend stocks for their regular payouts, but one hassle with many dividend stocks is that they tend to make payments quarterly. That requires some budget adjustments. But a few select stocks pay dividends monthly, which fits much better with most people's living expenses. In particular, Realty Income (NYSE: O), AGNC Investment (NASDAQ: AGNC), and LTC Properties (NYSE: LTC) have solid yields and have been reliable for dividend investors in the past.

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Realty Income

Realty Income has completely bought into the idea of paying its shareholders monthly, even dubbing itself The Monthly Dividend Company and obtaining a registered trademark on the concept. For 562 straight months, Realty Income has made dividend payments to its shareholders, and the real estate investment trust has regularly given investors increases to those dividends as well. Every quarter going back almost 20 years, Realty Income has made a boost to its monthly dividend, with the most recent 4% rise having come earlier this year. Based on its most recent payout, Realty Income yields about 4.6%.

Just one of the properties that Realty Income uses to generate income. Image source: Realty Income.

Realty Income generates the cash it needs to pay its dividends by maintaining a diversified real estate portfolio. It has more than 4,900 properties under long-term net lease agreements, with 250 commercial tenants covering 49 states and the territory of Puerto Rico. Strong total returns have also helped bolster shareholders' portfolios along with the consistent and growing dividend income that Realty Income has provided, and the healthy state of the real estate industry makes future success look likely for the REIT.

AGNC Investment

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AGNC is a REIT that focuses on agency mortgage-backed securities. The REIT maintains high levels of leverage, and that has allowed it to sustain a very high dividend yield over time. Currently, AGNC yields 10.5%, and its stock has seen its price rise by more than 10% so far in 2017 in addition to the monthly payments it has made. AGNC doesn't have the same track record of growth that Realty Income does, but many investors are content with the much-higher yield that it pays.

Leveraged REITs in the mortgage-backed securities realm have to deal with the ups and downs of the bond market, and rising short-term interest rates can reduce spreads and thereby crimp their ability to make large dividend payments. AGNC has in its past made dividend cuts, but it has also responded positively during favorable phases of the business cycle. This REIT can be volatile, but it offers huge yields to offset at least some of that risk.

LTC Properties

As its name suggests, LTC Properties specializes in real estate geared toward seniors who need long-term care services. Its portfolio has more than 200 assisted living, memory care, post-acute skilled nursing, and range-of-care facilities in 30 different states. The REIT works with operating partners to get the most out of each property, and LTC is working to diversify into new areas and find new types of properties in which to invest.

LTC has worked to enhance its shareholders' dividends, with seven straight years of rising payouts that include the most recent 6% rise in 2016. With a yield of 4.8%, LTC Properties is rewarding its investors at the same time that it seeks to take full advantage of demographic shifts that should keep demand for senior housing on the rise for at least the next decade.

Dividend stocks are great to have in your portfolio, especially if you need regular income. By focusing on stocks that pay dividends monthly, you can make sure you have the reliable payouts you need to budget accordingly and be financially secure.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.