5 Stocks That Pay Monthly Dividends in 2025

Investing in dividend-paying stocks has always been a smart way to generate passive income. For those seeking steady cash flow, monthly dividend stocks provide an attractive option. This article explores the best stocks that pay monthly dividends in 2025, their benefits, and tips for investing effectively.

Stack of coins with a growing plant symbolizing monthly dividend income and financial growth.

What Are Monthly Dividend Stocks?

Monthly dividend stocks are companies or funds that distribute dividends to shareholders every month instead of the typical quarterly payout schedule. These stocks are favored by income-focused investors, including retirees and those looking to supplement their regular income.

Why Consider Monthly Dividend Stocks?

Consistent Cash Flow: Ideal for covering monthly expenses or reinvesting.
Compounding Opportunities: Reinvesting dividends can lead to higher returns over time.
Portfolio Diversification: Many monthly dividend stocks come from various industries like REITs (Real Estate Investment Trusts), business development companies (BDCs), and energy companies.

Top Monthly Dividend Stocks for 2025

1. Realty Income Corporation (NYSE: O)

Dividend Yield: ~4.5%
Sector: Real Estate Investment Trust (REIT)
Realty Income, often called "The Monthly Dividend Company," has a long history of reliable payments. The company invests in commercial properties leased to well-known tenants like Walgreens and 7-Eleven.

2. Main Street Capital Corporation (NYSE: MAIN)

Dividend Yield: ~6.8%
Sector: Business Development Company (BDC)
Main Street Capital provides debt and equity capital to small and mid-sized businesses. Its diversified portfolio ensures consistent dividend payouts.

3. Pembina Pipeline Corporation (NYSE: PBA)

Dividend Yield: ~5.5%
Sector: Energy
Pembina Pipeline operates in the energy infrastructure sector, with consistent cash flow from transporting oil and natural gas.

Pembina Pipeline Overview

4. STAG Industrial, Inc. (NYSE: STAG)

Dividend Yield: ~4.2%
Sector: Industrial REIT
STAG focuses on single-tenant industrial properties across the U.S. Its monthly dividends and exposure to the growing e-commerce sector make it an attractive choice.

STAG Investor Relations

5. AGNC Investment Corp. (NASDAQ: AGNC)

Dividend Yield: ~13.5%
Sector: Mortgage REIT
AGNC specializes in mortgage-backed securities and offers one of the highest yields among monthly dividend stocks. However, it is more sensitive to interest rate changes, so investors should consider the risks.

AGNC Investment Overview

How to Choose Monthly Dividend Stocks

When selecting monthly dividend stocks, keep the following factors in mind:

Dividend Yield: A high yield may indicate risk. Focus on companies with sustainable payouts.
Payout Ratio: This measures how much of the company's earnings are distributed as dividends. A payout ratio above 90% can signal unsustainable dividends.
Business Model Stability: Choose companies with consistent cash flow, such as REITs or utilities.
Historical Performance: Research the stock’s track record for paying dividends and financial stability.
Industry Trends: Look for sectors poised for growth in 2025, such as clean energy or technology-driven REITs.

Pros and Cons of Monthly Dividend Stocks

Pros

Regular cash flow
Easier financial planning
Opportunity to reinvest frequently

Cons

Potentially lower growth compared to non-dividend stocks
High yields can indicate risk
Concentration in specific sectors like REITs and energy

Building a Monthly Dividend Portfolio

To create a well-diversified portfolio:

Diversify Across Sectors: Combine REITs, BDCs, and energy stocks for balanced exposure.
Use ETFs: Exchange-Traded Funds like Global X SuperDividend ETF (DIV) or Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) offer diversified monthly dividend options.
Focus on Quality: Choose companies with a strong history of dividend payments and stable fundamentals.

ETF.com - Monthly Dividend ETFs

Tax Implications

Dividends are subject to taxes depending on your country and the type of account you hold them in. It’s advisable to consult a tax advisor to optimize your investment strategy.

Conclusion

Monthly dividend stocks can be a great addition to your investment portfolio, providing consistent income and opportunities for growth. By focusing on high-quality companies like Realty Income and Main Street Capital, and diversifying your investments, you can create a robust portfolio tailored to your financial goals in 2025. Remember to research carefully and consult financial professionals when necessary.

Frequently Asked Questions (FAQs)

1. What are monthly dividend stocks?

Monthly dividend stocks are investments that distribute dividends to shareholders every month instead of the usual quarterly schedule. These stocks are popular among investors seeking regular income and compounding opportunities.

2. Why invest in monthly dividend stocks?

Monthly dividend stocks provide consistent cash flow, making them ideal for retirees, passive income seekers, and reinvestment strategies. They also help with financial planning and can be reinvested for compound growth.

3. What are the best monthly dividend stocks in 2025?

Some of the best monthly dividend stocks to consider in 2025 include:

Realty Income Corporation (NYSE: O) – A stable REIT with a reliable payout history.
Main Street Capital Corporation (NYSE: MAIN) – A business development company with strong returns.
Pembina Pipeline Corporation (NYSE: PBA) – A well-established energy infrastructure company.
STAG Industrial, Inc. (NYSE: STAG) – An industrial REIT benefiting from e-commerce growth.
AGNC Investment Corp. (NASDAQ: AGNC) – A high-yield mortgage REIT with monthly payouts.

4. Are monthly dividend stocks safe investments?

While many monthly dividend stocks are stable, high yields can sometimes signal risk. It’s important to research a company’s financial health, payout ratio, and business model before investing.

5. Can monthly dividend stocks grow in value?

Yes, but their growth potential is usually lower than growth stocks since a portion of earnings is distributed as dividends rather than reinvested into expansion.

6. How can I choose the best monthly dividend stocks?

When selecting monthly dividend stocks, consider:

Dividend Yield – Ensure it is sustainable (typically 3%-7%).
Payout Ratio – A lower ratio (below 90%) suggests the company can maintain its dividend.
Financial Stability – Companies with consistent revenue and profits are more reliable.
Industry Trends – Look for sectors poised for long-term growth, like energy, REITs, and infrastructure.

7. What are the risks of investing in monthly dividend stocks?

High yields may indicate financial risk (unsustainable dividends).
Sector concentration – Many monthly dividend stocks belong to REITs, BDCs, and energy, leading to less diversification.
Interest rate sensitivity – Rising interest rates can negatively affect REITs and mortgage-based companies.

8. Is it better to reinvest dividends or take cash?

Reinvesting dividends helps compound growth over time, especially in tax-advantaged accounts like an IRA.
Taking cash is better for those who rely on dividends for living expenses.

9. What are some good monthly dividend ETFs?

For diversified exposure, consider:

Global X SuperDividend ETF (DIV) – Focuses on high-yield global dividend stocks.
Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) – Offers monthly dividends with reduced volatility.
iShares Preferred and Income Securities ETF (PFF) – Invests in preferred stocks with monthly payouts.

10. How are monthly dividends taxed?

Qualified dividends (from U.S. stocks held long-term) are taxed at lower rates.
Ordinary dividends (REITs, BDCs, and foreign companies) are taxed as regular income.
Tax treatment varies by country, so consult a tax professional for optimal tax strategies.

11. Do all REITs pay monthly dividends?

No, while many Real Estate Investment Trusts (REITs) pay dividends, most follow a quarterly payout schedule. However, some, like Realty Income (O) and STAG Industrial (STAG), pay dividends monthly.

12. Can I live off monthly dividends?

Yes, but it requires a well-structured portfolio. To generate $3,000 per month, for example, you would need a portfolio of approximately $600,000 to $1 million, depending on the dividend yield.

13. What is a sustainable dividend yield?

A sustainable yield is typically 3%-7%. Yields above 10% may be unsustainable and could indicate financial instability.

14. How do I start investing in monthly dividend stocks?

Open a brokerage account with Fidelity, Schwab, or Robinhood.
Research and select stable monthly dividend stocks or ETFs.
Buy shares and enable dividend reinvestment (DRIP) for compounding.
Monitor your portfolio and adjust as needed.

15. Are there any commission-free platforms for buying dividend stocks?

Yes! Fidelity, Charles Schwab, TD Ameritrade, and Robinhood offer commission-free trading for dividend investors.

16. What is the difference between monthly and quarterly dividends?

Monthly dividends provide a more frequent income stream and are ideal for retirees and passive income investors.
Quarterly dividends are the industry standard and are more common among blue-chip stocks.

17. What happens if a company cuts its monthly dividend?

A dividend cut can signal financial trouble, leading to a drop in stock price. Investors should monitor payout ratios, company earnings, and industry trends to avoid companies at risk of reducing dividends.

18. How do business development companies (BDCs) pay such high dividends?

BDCs, like Main Street Capital (MAIN), are legally required to distribute at least 90% of their income to shareholders to maintain their tax advantages, resulting in higher dividend yields.

19. Are energy stocks good for monthly dividends?

Yes, energy companies like Pembina Pipeline (PBA) generate steady cash flow from long-term contracts, making them good candidates for reliable monthly payouts.

20. Where can I track monthly dividend stock payments?

You can track your monthly dividends using:

Yahoo Finance – Stock analysis and dividend history.
Seeking Alpha – Dividend yield charts and payout tracking.
Your brokerage account dashboard – Displays upcoming dividend payments and yields.

Followers

Total Pageviews