Investing in monthly dividend stocks could prove to be invaluable. In fact, these financial vehicles can potentially serve as a lucrative source of recurring passive income. Better, with their predictable 30-day payout schedule, these stocks stand in stark contrast to their quarterly counterparts. A handful of these reliable monthly stocks offer a substantial yield and promise of potential share upside should the market rally continue. Therefore, investing in the best passive income dividend stocks could be a primary income source. In addition, they can help quell concerns over market instability, ensuring a steady inflow of dividends month after month. That said; let’s explore seven of the top monthly dividend stocks to buy.
Monthly Dividend Stocks to Buy: Realty Income (O)
Realty Income (NYSE:O) is one of the most high-quality real estate investment trusts to consider. At the moment, it offers monthly dividends to its stockholders amidst a wavering market landscape. Bolstered by a robust portfolio of commercial properties and strong occupancy rates, Realty Income maintains a steady outflow of dividends. Also, its reliability and potential for capital appreciation make it an excellent candidate for income-focused investors.
Even better, Realty Income just blew past its top and bottom-line numbers. And, with a stellar occupancy rate of 99%, the REIT increased its 2023 guidance for normalized funds from operations per share of $4.05 to $4.15, as compared to the $4.12 consensus. Layer that with its track record of 26 consecutive years of dividend payout growth, and you have a bonafide winner.
Monthly Dividend Stocks to Buy: Permian Basin Royalty Trust (PBT)
Permian Basin Royalty Trust (NYSE:PBT) is a hydrocarbon specialist commanding a strong presence in the oil and natural gas sector. It draws its sales from the oil and gas treasures of the Permian Basin in west Texas, along with a handful of other Texan locations,
PBT’s performance has been remarkable despite the uncertainty in the geopolitical scene. Over the past year, PBT stock has soared, delivering more than a 44% return for its shareholders. From a financial standpoint, the trust has grown its revenues by over 300% year-over-year, along with an attractive balance sheet devoid of debt, which affords it tremendous flexibility.
Its stellar performances in the past few quarters result from an uptick in oil and gas production from its Texas Royalty Properties, nudging its distribution northward. Secondly, the trust has invested in new drill wells and completed wells supported by favorable market conditions. Moreover, PBT stock boasts a dividend yield of more than 4.7%, with 30 consecutive years of payments.
Monthly Dividend Stocks to Buy: Cross Timbers Royalty Trust (CRT)
Texas-based Cross Timbers Royalty Trust (NYSE:CRT) operates a robust royalty business, managing oil-producing properties in Texas, Oklahoma, and New Mexico. The current geopolitical conflicts affecting hydrocarbon resources have placed Cross Timbers in a position to capitalize.
The company maintains a strong financial position, carrying zero debt on its balance sheet. This provides flexibility to weather the challenges presented in the current economic climate. Their focus on collecting net income from fossil fuel royalties and working interests, along with increased oil and gas prices, has contributed to their strong performance in recent quarters. Furthermore, market volatility and decisions made by OPEC+ have added upward pressure on commodity prices, benefitting the trust.
The trust’s dividend offerings are mighty impressive, offering an 11% yield and three-year dividend growth of more than 36.4%, dwarfing the sector median by over 387%.
U.S. Global Investors (GROW)
For those looking to branch out from the energy sector and invest in an undervalued monthly dividend stock, you should consider U.S. Global Investors stock. The firm has effectively carved out a niche as an innovative investment manager armed with a wealth of experience in global markets. With a focus on specialized sectors, U.S. Global Investors (NASDAQ:GROW) offers a unique opportunity for the adventurous investor.
The firm has paid out a dividend in the past 15 consecutive quarters, 36% higher than its sector median. Moreover, its dividend payout has grown over 44% in the past three years on average. Additionally, GuruFocus gives it a 10/10 rating in terms of financial strength, boasting robust liquidity metrics. Moreover, the investment research platform believes that GROW stock is significantly undervalued, trading at a 250% discount to its intrinsic value.
LTC Properties (LTC)
With its portfolio of senior housing and skilled nursing facilities, LTC Properties (NYSE:LTC) is an intriguing long-term play in the REIT space. In 2022, the company began to shrug off the pandemic’s lasting effects as occupancy rates climbed, nudging its shares back toward pre-2020 levels. However, its stock has pulled back of late.
Nevertheless, LTC Properties sits at the heart of a larger demographic shift with the aging baby boomer generation. This generational tide and a rise in life expectancy are set to make LTC stock an incredible long-term income play. Given this backdrop, LTC, with its compelling yield of 6.9% and an earnings yield of 6.1%, shapes it up to be a solid pick in its niche. However, it is important to note that the stock is for those with a long-term horizon who can stomach short-term volatility.
Main Street Capital Corporation (MAIN)
Main Street Capital Corporation (NYSE:MAIN) is an internally managed business development company that has proven to be a boon for shareholders since its initial public offering in 2007. With over $6.6 billion in capital under management, it’s no small fry in the investment pond. Interestingly, the bulk of its funds are invested internally, while the rest are put to work as investment advisors to external parties.
Operating fundamentals for Main Street are solid, with revenue growth averaging 12.2% in the past five years. Moreover, over the same time horizon, its net income and levered free cash flow margins have averaged 61.6% and 44.4%, respectively. More importantly, for its investors, it boasts a dividend yield of 6.7% with an impressive return on equity of roughly 12.7%. Hence, Main Street Capital is a compelling name in the investment landscape.
Apple Hospitality REIT (APLE)
Apple Hospitality REIT (NYSE:APLE) oversees a vast portfolio of upscale hotels, including notable brands like Marriott. With properties spanning over 90 distinct markets, the company has been incredibly successful in geographically diversifying its business. Moreover, the continued pent-up travel demand is working in its favor, providing a solid boost to its operations.
In the first quarter, the firm’s earnings exceeded Wall Street estimates, with leisure demand and increased business travel driving strong performance. Revenue rose to $311.5 million, surpassing the consensus estimate of $294.7 million and outpacing last year’s quarter ending in March. Additionally, hotel occupancy climbed to 72.0% from last year’s 67.0%, reflecting a promising trend moving forward. GuruFocus believes the stock is modestly undervalued with solid profitability metrics. More importantly, it yields a stellar 6.2%, with the REIT paying out more than 60% of its net earnings to its shareholders.
| O | Realty Income | $59.99 |
| PBT | Permian Basin Royalty Trust | $24.15 |
| CRT | Cross Timbers Royalty Trust | $22.23 |
| GROW | U.S. Global Investors | $2.74 |
| LTC | LTC Properties | $32.58 |
| MAIN | Main Street Capital | $40.49 |
| APLE | Apple Hospitality REIT | $15.21 |
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.