Monthly dividend stocks offer investors the opportunity to generate recurring passive income while aligning that income's timing with real-world expenses. This can be particularly useful for people counting on dividends for income today.
With monthly dividend payments in mind, here's a closer look at the top monthly high-yield dividend stocks for 2023. The combination makes these stocks great for earning passive income.
Top monthly dividend stocks for 2023
Top monthly dividend stocks for 2023
Dozens of dividend stocks pay monthly dividends in 2023. However, not all of them are worth an investor's consideration. Some don't make the cut because of a below-average dividend yield or slow dividend growth. Meanwhile, others are at a higher risk of reducing their dividends if market conditions deteriorate. That narrows the options considerably.
Here's a list of the best monthly dividend stocks to consider in 2023:
| Monthly Dividend Stock | Ticker Symbol | Dividend Yield |
|---|---|---|
| EPR Properties | (NYSE:EPR) | 7.3% |
| Agree Realty | (NYSE:ADC) | 4.5% |
| Gladstone Commercial Corporation | (NASDAQ:GOOD) | 9.7% |
| LTC Properties | (NYSE:LTC) | 6.8% |
| Realty Income | (NYSE:O) | 5.1% |
| SL Green | (NYSE:SLG) | 12.5% |
| STAG Industrial | (NYSE:STAG) | 4.1% |
Let's take a closer look at each of these top monthly dividend stocks. Each offers a much higher dividend yield than the average stock in the S&P 500 (1.6% as of May 18, 2023).
1. EPR Properties
1. EPR Properties
EPR Properties is a real estate investment trust (REIT) that specializes in owning experiential real estate such as movie theaters, eat-and-play venues, ski resorts, and gaming facilities. It secures these properties by signing triple net leases with the venue operators, meaning the tenants bear the responsibility for building insurance, maintenance, and real estate taxes.
The COVID-19 pandemic had a significant impact on experiential real estate. Many of these facilities had to temporarily close their doors or operate at reduced capacity. And that impacted their ability to pay rent, forcing EPR Properties to suspend its monthly dividend in 2020.
The good news is that most of its tenants have seen a return to business as usual over the past couple of years and, in some cases, even higher demand for the in-person social experiences they offer.
The bad news: Most isn't all, and EPR's largest group of tenants -- movie theaters -- continue to struggle with revenues well below pre-pandemic levels. One of its larger tenants -- Cineworld, which owns Regal Theatres -- filed for bankruptcy in 2022 and is going through a reorganization.
With more than 40% of its business tied to movie theaters, management is trying to reduce its exposure to this struggling industry. But there's still reason to be hopeful as box office revenues are improving, though still well below 2019 levels. EPR should be able to make the transition while supporting its dividend, but this represents a not-insubstantial risk to EPR's ability to maintain its dividend.
2. Agree Realty
2. Agree Realty
Agree Realty is another REIT. These companies often make for good monthly dividend stocks because they generate recurring rental income.
This REIT owns freestanding retail properties secured by triple net leases. It focuses on owning properties leased to essential retailers, such as grocery, home improvement, dollar stores, and drug stores, which are less susceptible to disruption from e-commerce or a recession. This strategy enables Agree Realty to generate steady rental income to support its dividend.
E-commerce
Agree Realty switched from a quarterly to a monthly dividend payment schedule in January 2021. It has an excellent dividend track record overall. This REIT has increased its dividend at a 5.5% compound annual rate over the past decade, though payout growth has slowed to 3.8% more recently.
Nonetheless, that upward trend should continue as the company keeps expanding its portfolio. The retail REIT acquired a record $1.4 billion of properties in 2021, though it has recently moderated more. Management expects the total to be $1.2 billion in 2023. Between that steady portfolio growth and strong tenant relationships (it has over 13 years in average lease term under contract), Agree Realty should remain a modest, reliable monthly dividend grower for years to come.
3. Gladstone Commercial Corporation
3. Gladstone Commercial Corporation
Gladstone Commercial is a diversified REIT focused on net leased office and industrial properties in the U.S. -- each representing 48% of its portfolio -- along with some retail and medical office buildings. This REIT also concentrates on secondary markets because they offer higher investment yields.
This strategy has enabled Gladstone to generate very stable income, but its streak of more than 200 consecutive monthly dividends either at or above the prior month's level came to an end in 2023. The culprit -- poorly performing office properties -- led to a 20% dividend cut as the company worked through its portfolio to offload unprofitable properties.
While we can't count out another dividend cut, management seems to have stabilized the business and is back on the offensive, acquiring high-demand industrial properties and ensuring its office properties are well-tenanted for the long term.
4. LTC Properties
4. LTC Properties
LTC Properties is a healthcare REIT. It primarily invests in senior housing and skilled nursing properties secured by triple net leases, mortgage loans, and other cash-generating investment structures. This strategy gives the REIT a relatively steady income to support its monthly dividend.
The pandemic hit the senior housing sector hard, impacting LTC Properties' tenants. Several struggled to pay rent, leading some to file for bankruptcy. However, this REIT's financial strength helped it weather the storm and offset some of the lost income with new investments, allowing it to maintain its monthly dividend. Yet, LTC has been unable to increase its payout for more than a half-decade -- since 2016, to be exact.
LTC faces some good long-term trends but operates in a tough industry. In 2030, the number of Americans 65 and older will be double 2010's 65-and-up population, a positive tailwind for the company. But it must continue to stabilize its tenants and align itself with the best operators for the big-picture tailwind to reward patient shareholders. Meanwhile, investors can earn almost 7% in yield for being patient.
5. Realty Income
5. Realty Income
When it comes to monthly dividend stocks, Realty Income is the clear leader. It bills itself as The Monthly Dividend Company, having paid more than 635 consecutive monthly dividends as of May 2023. Since its initial public offering (IPO) in 1994, Realty Income has increased its dividend more than 100 times while raising the payout at a 4.4% compound annual rate, giving this REIT more than 25 years of dividend increases.
Realty Income has lots of room to grow despite most of its tenants being relatively slower-growth businesses. The company estimates the global market opportunity for the single-tenant net lease real estate it targets to be $12 trillion. That's a big opportunity to continue consolidating its tenants' properties under its ownership, growing the payout, and generally rewarding patient investors monthly, year in and year out.
6. SL Green
6. SL Green
SL Green is another REIT and the largest office landlord in New York City. For years, owning Manhattan office buildings -- some of the most highly demanded, irreplaceable real estate assets on Earth -- was a huge strength.
But the pandemic and the acceleration in changes to how and where people work continue to weigh on the office REIT. SL Green's management is adapting to the new reality by selling its least-desirable and non-core assets and focusing on tenanting its vacant properties at competitive, profitable rates.
It used the proceeds of those sales to reduce its debt by 9% in 2022, repurchase stock, and start going back on offense. The bad news for longtime investors is these moves didn't happen quickly enough to save its status as a Dividend Achiever. SL Green lowered its monthly payout by 13% at the start of 2023.
While the office environment remains a bit fluid, and another dividend cut could still be on the table, the worst is likely over for SL Green. More risk-tolerant investors should consider it a compelling turnaround investment.
7. STAG Industrial
7. STAG Industrial
STAG Industrial, another REIT, focuses on owning industrial real estate, such as warehouses and light industrial facilities, which are in high demand. The pandemic accelerated e-commerce adoption and increased manufacturing in the U.S. to combat supply chain issues. That has kept occupancy levels high while pushing up rental rates, enabling STAG to generate steadily rising rental income.
STAG has boosted its dividend over the years, with growth driven largely by the REIT's ability to consistently expand its portfolio. STAG has added more than 400 properties to its portfolio since its IPO a decade ago, increasing its portfolio to more than 500 buildings.
This industrial REIT expects the steady expansion to continue. It's targeting $1 billion to $1.2 billion of property purchases each year. Add that to the growing rental income from its existing properties, and STAG should be able to continue increasing its monthly dividend, so long as you're not expecting big raises. Its most recent increase was less than 1%, and over the past five years, the payout has only risen 3.5%.
Related dividend stocks topics
Earning recurring income
Invest in monthly dividend stocks for recurring income
Monthly dividend stocks make it easy for investors to earn passive income. They can use that money to cover their monthly expenses or reinvest their dividends and set themselves up to generate even more recurring cash flow in the future when they need it.
While dozens of companies pay monthly dividends, these monthly dividend stocks stand out as either stable and safer dividend stocks or, in a few cases, riskier -- but potentially more rewarding -- investments in their potential to turn things around.
