How to Make $1,000/Month in Passive Income with These Monthly Dividend Stocks

If you love the idea of getting paid every month just for holding stocks, monthly dividend stocks might be exactly what you're looking for. Unlike companies that pay dividends quarterly, these stocks send out payments every single month—making them a great choice for anyone who wants steady, predictable income. Whether you’re reinvesting your dividends to compound faster or using them to cover small expenses, monthly payers can be a solid addition to your portfolio.

What Are Dividends? (For Complete Beginners)

If you’re new to investing, you might have heard people talk about dividends, but what exactly are they? Let’s break it down in the simplest way possible.

Dividends = Companies Paying You for Holding Their Stock

When you own a company’s stock, you become a shareholder. Some companies share their profits with shareholders by paying out dividends—which is basically free money just for holding their stock.

How Do Dividends Work?

Let’s say you own 100 shares of a company that pays a $1 dividend per share per year.

• This means you’ll receive $100 per year in dividends (100 shares x $1 per share).
• If the company pays quarterly dividends, you’ll get $25 every 3 months.
• If it’s a monthly dividend stock, you’ll get about $8.33 per month.

Why Do Companies Pay Dividends?

Not all companies pay dividends, but those that do are usually:
✅ Profitable & Stable – They have extra cash and want to reward investors.
✅ Long-Term Focused – They attract investors who want consistent income.
✅ Industry Leaders – Many big companies like Coca-Cola (KO), Johnson & Johnson (JNJ), and Realty Income (O) have been paying dividends for decades.

Types of Dividend Stocks

There are different kinds of dividend-paying companies:

• Blue-Chip Dividend Stocks – Large, stable companies like Apple (AAPL) or Procter & Gamble (PG).
• High-Yield Dividend Stocks – Pay a higher percentage, but can be riskier. (Examples: REITs, BDCs, Energy Stocks)
• Dividend Growth Stocks – Lower yields but consistent dividend increases. (Examples: Visa (V), Microsoft (MSFT))
• Monthly Dividend Stocks – Pay every month instead of quarterly. (Examples: Realty Income (O), Main Street Capital (MAIN))

What Can You Do with Dividends?

1️⃣ Reinvest Them – Use them to buy more shares and compound your wealth faster (this is called DRIP – Dividend Reinvestment Plan).
2️⃣ Take the Cash – Withdraw them as passive income to cover expenses.
3️⃣ Diversify Your Portfolio – Invest in more dividend stocks or ETFs.

Which Stocks Pay Dividends Monthly?

Realty Income (O) – 5.8% Yield

Known as The Monthly Dividend Company, Realty Income is a real estate investment trust (REIT) that owns commercial properties like retail stores and offices. They’ve been paying and increasing dividends for over 50 years.

📌 If you're into dividend-paying real estate stocks, you might also enjoy this breakdown of EOG Resources as a hidden gem in the energy sector.

STAG Industrial (STAG) – 4.0% Yield

STAG owns warehouses and distribution centers, making it a key player in e-commerce supply chains. They’ve paid monthly dividends for over a decade.

📌 Given how industrial real estate is tied to economic growth, this post on MercadoLibre as a top growth stock might also interest you.

Main Street Capital (MAIN) – 7.5% Yield

Main Street Capital is a business development company (BDC) that invests in small businesses and provides funding. They’ve been consistently paying monthly dividends for more than 15 years.

📌 If you're exploring BDCs, you might want to see why betting big on Nu Holdings stock could be smart.

Pembina Pipeline (PBA) – 5.2% Yield

Pembina Pipeline is a Canadian energy infrastructure company that transports oil and natural gas. They’ve been paying dividends for more than 25 years, with a strong history of monthly payments.

📌 If you're looking for long-term investments in energy, check out this investing playbook for 2025.

LTC Properties (LTC) – 6.7% Yield

LTC Properties is a REIT that focuses on senior housing and healthcare facilities, benefiting from aging demographics. They’ve been paying monthly dividends for over 20 years.

📌 With the rise of healthcare stocks, you might also be interested in Hims & Hers stock after its recent FDA news.

What Funds Pay Monthly Dividends?

Global X SuperDividend ETF (SDIV) – 10.94% Yield

Holds high-yield stocks from around the world, offering investors exposure to some of the highest dividend-paying companies globally.

iShares Preferred & Income Securities ETF (PFF) – 6.23% Yield

Focuses on preferred stocks, which tend to be more stable and provide consistent income compared to common stocks.

Vanguard Real Estate ETF (VNQ) – 3.65% Yield

A diversified REIT fund that provides exposure to income-generating real estate properties across various sectors.

SPDR Dow Jones REIT ETF (RWR) – 3.32% Yield

Another real estate-focused ETF that provides investors with consistent dividend payouts from a broad selection of real estate investment trusts (REITs).

Invesco High Yield Equity Dividend Achievers ETF (PEY) – 4.65% Yield

Invests in companies with a strong history of paying and increasing dividends, making it a great option for long-term income investors.

If you want a better portfolio tracking tool, check out Personal Capital, which helps you manage and analyze your investments with ease.

Which Stock Pays the Highest Monthly Dividend?

AGNC Investment Corp. (AGNC)

Yield ~13%. A mortgage REIT that invests in government-backed mortgage securities. High payouts, but sensitive to interest rate changes.

Prospect Capital (PSEC)

Yield ~11%. A business development company providing financing to private firms. High risk, but steady monthly payouts since 2004. Want to see more stocks with big upside? Check out why Broadcom could 10x with AI.

SLR Investment Corp. (SLRC)

Yield ~10%. Provides loans to mid-sized businesses and has paid dividends for over 10 years.

Gladstone Commercial (GOOD)

Yield ~8%. Owns commercial real estate and has been a reliable monthly dividend payer since 2003.

EPR Properties (EPR)

Yield ~7%. Focuses on entertainment properties like casinos and amusement parks. They’ve paid dividends since the early 2000s. For more insights, see why ASML stock could be a long-term winner.

For advanced stock screening, you can use TradingView Screener to analyze dividend stocks based on yield, payout ratio, and sector trends.

Why Invest in Monthly Dividend Stocks?

• Steady Income – Great for covering bills, reinvesting, or just having extra cash flow.
• Faster Compounding – If you’re reinvesting dividends, getting paid monthly means you can compound your investments quicker.
• Diversification – Monthly dividend payers exist in multiple sectors, so you’re not relying on just one industry.

How to Evaluate a Dividend Stock?

Not all dividend stocks are created equal. Before investing, analyze these key metrics:

1. Dividend Yield

The annual dividend payment divided by the stock price. High yields (5%+) can be attractive but might indicate risk.

2. Payout Ratio

The percentage of earnings paid as dividends. A payout ratio over 80% could be unsustainable.

3. Dividend Growth

Look for consistent increases over 5-10 years, as this signals strong financial health.

4. Cash Flow & Earnings Stability

A company must have strong cash flow and stable earnings to maintain dividend payouts.

5. Industry Strength

Certain sectors like REITs, utilities, and consumer staples tend to have stable, long-term dividends.

By checking these five metrics, you can avoid dividend traps and find sustainable income sources.

Dividend Investing Strategies for Beginners

1. Dividend Reinvestment Plan (DRIP)

Instead of taking cash, automatically reinvest dividends to compound your returns over time.

2. High-Yield vs. Dividend Growth Stocks

• High-Yield Stocks (5%+): Provide immediate income but can be risky. (Examples: REITs, BDCs, MLPs)
• Dividend Growth Stocks (2-4% yield): Lower yield but consistent dividend increases over time. (Examples: JNJ, MSFT, V)

3. ETFs vs. Individual Stocks

• Dividend ETFs (like SCHD, VYM) = Passive income + diversification
• Individual stocks = More control but requires research

Final Thoughts

Monthly dividend stocks can be a solid way to build passive income, but don’t just chase high yields. Look at financials, payout ratios, and long-term stability to make sure the company can actually sustain its payments. Diversify across different sectors, reinvest where it makes sense, and keep an eye on how things play out over time.

Want to Build Your Own Monthly Dividend Income Stream?

🔥 Get Paid Monthly Without Constantly Watching the Market! 🔥

I put together a free Google Sheet with 40+ monthly dividend stocks like $O, $AGNC, $MAIN + plug-and-play formulas to help you figure out:

✅ How much you need to invest to make $100/month in dividends
✅ What it takes to hit $500/month in passive income

It’s 100% free – grab it now! 🚀

Here are some of my recent blogs you might enjoy:

• Why Nvidia stock might still be expensive
• How to become a millionaire on a low income
• Is TSMC stock the best investment for 2025?
• What is the P/E ratio? Explained with examples

What’s your favorite monthly dividend stock? Let me know! 🚀

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