Investors love dividend stocks, especially the high-yield variety, because they offer a significant income stream and have massive total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation.

For example, if you buy a stock at $20 that pays a 3% dividend and goes up to $22 in a year, your total return is 13%. That is, 10% for the increase in stock price and 3% for the dividends paid.

Most stocks pay quarterly dividends, which is fine for many shareholders who reinvest dividends. However, many investors rely on dividends as part of a passive income stream, and getting a monthly dividend payout is more beneficial. Typically, real estate investment trusts (REITs), business development companies, and closed-end funds are among the investment vehicles that pay distributions monthly.

We screened our 24/7 Wall St. monthly stock dividend research database looking for quality companies that pay high-yield dividends every 30 days. Three of our favorite stocks are our top picks for January. All are rated Buy at the top Wall Street firms that we cover.

Why do we cover dividend stocks?

Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations.

Apple Hospitality REIT

Apple Hospitality REIT Inc. (NYSE: APLE) is a publicly traded REIT that pays a dependable 5.95% dividend and stands out in the market with its unique offering. Despite its name, it is not affiliated with the technology giant. However, it offers a solid total return potential, owning one of the largest and most diverse portfolios of upscale, room-focused hotels in the United States.

Apple Hospitality’s portfolio comprises 220 hotels with over 28,900 guest rooms in 87 markets throughout 37 states and one property leased to third parties.

Concentrated on industry-leading brands, the company’s hotel portfolio comprises:

• 97 Marriott-branded hotels
• 119 Hilton-branded hotels
• Four Hyatt-branded hotels

Oppenheimer has an Outperform rating and an $18 price target.

EPR Properties

This REIT invests in some of the most popular entertainment companies and pays a solid 7.56% dividend. EPR Properties (NYSE: EPR) is a leading experiential net lease REIT specializing in select enduring experiential properties in the real estate industry.

The company focuses on real estate venues that create value by facilitating out-of-home leisure and recreation experiences where consumers spend their time and money.

EPR Properties has nearly $6.7 billion in total investments across 44 states. It adheres to rigorous underwriting and investing criteria centered on key industry, property, and tenant-level cash flow standards. Senior management believes its focused approach provides a competitive advantage and the potential for stable and attractive returns.

Raymond James has an Outperform rating and a solid $54 target price objective.

Main Street Capital

This company is a favorite across Wall Street and offers a very solid 7.58% dividend. Main Street Capital Corp. (NASDAQ: MAIN) is a private equity firm that provides equity capital to lower-middle market companies.

The firm also provides debt capital to middle-market companies for:

• Acquisitions
• Management buyouts
• Growth financings
• Recapitalizations
• Refinancing

The firm seeks to partner with entrepreneurs, business owners, and management teams and generally provides “one-stop” financing alternatives within its lower middle market portfolio.

Main Street Capital typically invests in lower middle-market companies with annual revenues between $10 million and $150 million. The firm’s middle-market debt investments are in businesses generally larger in size than its lower middle-market portfolio companies. It also makes majority and minority equity investments.

Royal Bank of Canada has an Outperform rating and a $52 target price, which should rise soon.

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