4 Monthly Dividend Stocks That Could Pay You Like Clockwork in Retirement
Most dividend stocks pay quarterly, leaving retirees to juggle bills against an awkward schedule. These four REITs flip that problem by landing checks at different points every single month, but only if each one can keep covering its payout through…
Retirement bills show up every month, and these four real estate investment trusts (REITs) pay you every month too. Realty Income (NYSE:O), Agree Realty (NYSE:ADC), LTC Properties (NYSE:LTC), and EPR Properties (NYSE:EPR) all pay monthly, and their payment dates fall at different points in the month, so together they can work like a steady income calendar. For a retiree, the key question is whether each payout is covered by cash flow, backed by a sound balance sheet and supported by a track record. On that point, Realty Income just declared its 676th consecutive common stock monthly dividend. Here is how all four hold up.
Realty Income: 116 Straight Quarterly Raises and Counting
Realty Income pays an annualized forward dividend of $3.258 per share. At a recent price of $58.89, that works out to a forward yield of about 5.5%, which puts it firmly in high-yield territory. The next check is scheduled for November 13.
Dividend safety: Third-quarter adjusted funds from operations (AFFO, the cash flow measure REITs use to fund dividends) came in at $1.12 per diluted share, up 3.7% year over year. The company paid $0.813 in dividends per share over the quarter, which means it paid out about 73% of AFFO. Management raised full-year AFFO guidance to $4.45 to $4.46. Occupancy is 98.8%, and the stock trades at 14.08 times free cash flow, which equals a 7.1% free cash flow yield. Liquidity is backed by a $5.5 billion revolving credit facility. As for its record, Realty Income announced its 116th consecutive quarterly dividend increase (136th since its 1994 NYSE listing). Over the past year alone, the monthly payout rose from $0.2695 to $0.2715.
Bull case: Scale keeps the raises coming. Realty Income invested $2.6 billion at a 6.8% initial cash yield, about 170 bps above its leverage-neutral cost of capital, and data centers made up 11.7% of third-quarter new investments. Quarterly revenue rose to $1.62 billion, up 10.3%. For a retiree, that means small but steady raises from a landlord with tenants across retail, industrial, gaming, and now digital infrastructure.
Risk: Debt is getting more expensive. Interest expense rose to $333.6 million from $294.5 million, and net debt runs at 7.8x EBITDA. That leaves less room for error if borrowing costs stay high.
Agree Realty: Strongest Balance Sheet in the Group
Agree Realty recently raised its monthly dividend to $0.271 from $0.267, for an annualized forward rate of $3.252. At $69.70, the forward yield is about 4.7%. It has the lowest yield in this group and the strongest balance sheet.
Dividend safety: Second-quarter AFFO reached $1.14 per share, up 7.4% year over year, compared with about $0.801 in quarterly dividends. This represents a payout of about 70% of AFFO. Second-quarter guidance raised full-year AFFO to $4.57 to $4.59. Agree Realty carries investment-grade issuer ratings of A- from Fitch, Baa1 from Moody’s and BBB+ from S&P, plus $1.9 billion of liquidity and net debt to recurring EBITDA of 5.2x (3.7x pro forma). The company has paid 172 consecutive common dividends, and the monthly rate has risen steadily from $0.217 in late 2020.
Bull case: This is a portfolio built for recessions. Agree Realty owns 2,825 net-lease retail properties in all 50 states and D.C., with 99.8% occupancy and an 11.2-year weighted-average lease term. Its tenants include Walmart, Tractor Supply, Dollar General, TJX Companies and Kroger. It bought a record $502 million of properties in the second quarter at a 7.0% cap rate, then raised its full-year investment guidance to $1.6 billion to $1.8 billion. Shares are down 0.89% year to date, so the dividend has kept rising while the stock price stalled.
Risk: Agree Realty funds its growth by issuing shares, diluting per-share results. Second-quarter EPS of $0.44 missed the $0.47 consensus after the company raised about $686 million of forward equity in the first half.
LTC Properties: End-of-Month Checks Backed by Seniors Housing
LTC Properties pays $0.19 per month, or $2.28 a year. At $45.14, that is a forward yield of about 5.1%. Its checks arrive near month-end, with the next due November 30 and December 31. That fills the gap left by the mid-month payers in this group.
Dividend safety: Third-quarter Core FFO was $0.71 per share and Core FAD was $0.73, compared with a $0.57 quarterly dividend. That puts the payout at about 80% of Core FFO. LTC reaffirmed full-year guidance of $2.76 to $2.78 for Core FFO and $2.83 to $2.85 for Core FAD. LTC holds $183 million in cash and has expanded its credit facility to $1.0 billion. The payout has been $0.19 every month since 2017, up from $0.11 in 2005. Retirees get stability here more than growth. Ignore the headline GAAP EPS of $6.39, which was inflated by a $324 million gain on asset sales.
Bull case: LTC is moving toward seniors housing it operates directly (its SHOP portfolio), a business that benefits from an aging population. SHOP acquisitions are approaching $950 million year to date, and SHOP is projected to reach about 50% of annualized NOI by year-end and 75% by the end of 2028. Core SHOP occupancy rose to 91.0% from 89.4% in the first quarter, when guidance assumed about 13% NOI growth. Shares are up 39.83% year to date.
Risk: Under the operating model, LTC takes on the ups and downs of running the communities instead of collecting fixed rent. Results depend on 14 third-party SHOP operators managing labor and occupancy well.
EPR Properties: Biggest Yield With the Most Coverage
EPR Properties pays $0.31 per month, or $3.72 annualized. At $60.08, the forward yield is about 6.2%, which makes it the only ultra-high-yield name in this group. Investors can expect the next payout on November 16.
Dividend safety: EPR has the most buffer of the four. Its chief financial officer, Mark Peterson, said on the third-quarter call: “Our common dividend continues to be very well-covered with an AFFO payout ratio of 60% for the third quarter.” AFFO rose to $1.54 per diluted share, up 10.8%. One note: EPR recently stopped subtracting maintenance capex from AFFO, a change management called insignificant. Full-year FFOAA guidance was raised to $5.49-$5.57. Tenant rent coverage stands at 2.1x, fixed charge coverage at 3.5x, and the $1 billion revolver had no balance outstanding. Its track record has a gap: monthly payments stopped after the April 29, 2020 ex-date and restarted in July 2021. Since then, the payout has risen from $0.275 to today’s rate.
Bull case: Spending on experiences is holding up. Theatre box office is up about 20% year to date. EPR is investing at about an 8.3% initial cash yield and has added Live Nation and Life Time as tenants, while it works to bring theaters down from 34% of rent toward about 20%. On the third-quarter call, the chief executive, Greg Silvers, said: “What we’re seeing is people choosing experiences over stuff.”
Risk: A few tenants account for much of the rent. The top 10 tenants generate 68.0% of base rent, led by Topgolf at 14.5%, AMC at 14.2% and Regal at 10.2%.
Four Paydays, One Monthly Income Calendar
Realty Income and Agree Realty both pay on November 13, EPR follows on November 16, and LTC pays on November 30, so the checks are spread across the month. Realty Income and Agree Realty bring the longest records of raises and net-lease stability. LTC adds steady end-of-month income from senior housing. EPR offers the biggest yield with the most coverage behind it. Each payout is covered by recurring cash flow, so the monthly checks rest on more than the schedule alone.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
