Investing

Passive Income Seekers Should Look at These Monthly Dividend Paying Stocks

Omor Ibne Ehsan

Published: March 11, 2025 2:48 pm

Dividend stocks are gaining popularity again due to the recent wave of bearishness in the stock market. Both retail and institutional investors chased AI and growth stocks in the past two years, and dividend stocks were rarely on their bucket list as the returns paled compared to the hottest names on the market.

Many on Wall Street now think the pendulum has swung. The GDP forecast for Q1 2025 is -2.8% and most macro indicators are negative. Despite some tech stocks shaving off a third of their value, people are still hesitant to buy the dip due to a lack of positive news and general uncertainty. And as long it stays that way, a sustained recovery isn’t very likely.

With that in mind, monthly dividend stocks are worth looking into. Your typical dividend stock pays dividends quarterly, but monthly dividends are better for two main reasons: you receive cash sooner, and the faster reinvestment cycle gives you a slight compounding edge over time. Plus, there’s the added benefit of having a frequent stream of cash you can access if you ever face a cash crunch in a recession.

24/7 Wall St. Key Points:

• Monthly dividend stocks are great for long-term reinvestments and as a cushion during recessions.
• They’re also great if you just want passive income.
• These monthly dividend stocks are back in the spotlight as the broader market corrects.
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Realty Income (O)

Fears of a recession have picked up, and so have the fears surrounding the real estate sector. Real estate was the focal point of the Great Recession of 2008, so it’s only natural that Wall Street is nervous about it this time around. That said, you shouldn’t shy away from investing in it.

The fear has caused many real estate stocks to decline already. Realty Income (NYSE:O) is down over 27% from its pre-COVID prices, so the downside risk is relatively low compared to most other dividend stocks.

Real estate companies have also learned from the previous recession. The company’s tenant portfolio is concentrated on businesses that provide non-discretionary goods and services; almost half have investment-grade credit ratings. This has helped Realty Income to always maintain occupancy rates above 96%.

It plans to invest $4 billion this year on top of its $3.9 billion investment last year at a 7.4% yield.

It’s often the first thing that springs into mind when considering a monthly dividend stock. The forward dividend yield is 5.6%.

Main Street Capital (MAIN)

Main Street Capital (NYSE:MAIN) is a business development company and has delivered stellar returns (for a dividend stock, at least) over the past five years at 97.7%. It has declined recently due to the recent bout of panic, and the gains it is sitting on do leave more downside risk in the worst-case scenario.

Regardless, any dip here is worth buying hand-over-fist. The company has an excellent track record, and the dividend yield is pretty juicy at 5.39%. The company’s management is very prudent, and no investment exceeds 5% of its portfolio income. Any single industry is typically below 10% of the portfolio’s value.

Main Street focuses on first-lien secured loans. These loans get priority repayment, and Main Street can seize property if the loans aren’t repaid. This should shield it from a big hit if loans don’t perform as well in a recession.

It’s worth mentioning that the stock fell about 61% during the 2020 recession. BDCs see their stocks go down disproportionately more during a financial crisis due to how they operate. Still, this is not a business that will go under and should send dividends your way just fine as the stock recovers.

Phillips Edison (PECO)

Phillips Edison (NASDAQ:PECO) is a real estate company that owns grocery-anchored neighborhood shopping centers. You’ll notice that the stock has a lower yield of 3.52%, but considering the stability these shopping centers provide, it’s worth buying.

Phillips Edison’s management estimates that about 70% of its rent comes from tenants that provide necessity-based goods and services. That should generate plenty of earnings to keep its monthly dividends afloat. I’m confident that it can weather the next downturn well.

The financials are also very strong here. It beat both top-line and bottom-line estimates in Q4 2024. Revenue grew 12.04% year-over-year, and its occupancy rate stood at 97.7%. Same-center NOI growth came in at 6.5%.

2025 guidance projects Core FFO per share of $2.52 to $2.59. This implies 5.1% growth at the midpoint despite 200bps of interest rate headwinds.