2 Stocks That Cut You a Check Each Month

Dividend stocks are a great way to generate income from your investments. However, most dividend stocks only provide payouts once a quarter. Some pay only semi-annually, and others pay their dividend just once per year. That can result in a very lumpy stream of income.

If you want consistent monthly income, just a handful of companies will pay out their dividend every month. That means finding one of those companies trading at a fair price is an absolute gem for income investors. Two companies can meet those narrow criteria and are worth a closer look for investors interested in monthly income: Realty Income (NYSE: O) and SL Green Realty (NYSE: SLG).

1. Realty Income

Realty Income prides itself on paying a monthly dividend — even going so far as to itself “the monthly dividend company.” The real estate investment trust, or REIT, has managed to raise that monthly dividend 123 times since going public in 1994. Its most recent dividend increase brought the annualized dividend to $3.072 per share.

Realty Income has built a portfolio of properties and filled them with tenants that have been able to weather numerous economic downturns. All of its top 20 tenants fall into at least one of the following categories: Non-discretionary, low price point, service-oriented, or non-retail. That makes them far more resilient than something like high-end luxury retailers, which may see a downturn in sales amid a recession.

As a result, Realty Income’s occupancy rate remains consistently high. It managed to fill 98.8% of its units in the third quarter. Its long-term leases also ensure it’ll maintain that high occupancy rate. The average lease still has about 10 years left.

The downside of Realty Income’s strategy is that it means growth is slow and steady. Rents increase just a percentage point or two per year. As such, its main form of growth is through acquisitions. Its most recent one, Spirit Realty, will cost more than $9 billion, but add 2,000 new…