Which stock gives dividends every month

Imagine getting a small, extra paycheck in your bank account every single month, not from a job, but from an investment. That’s the core appeal of generating passive income, and it’s what draws many people to look for monthly dividend stocks. While most companies that share their profits do so every three months, a special few are set up to pay out every 30 days.

So, where does this money actually come from? A dividend is a “thank you” bonus from a company for being one of its part-owners. When a business earns a profit, it can choose to reinvest that money back into its operations or share a portion of it directly with its stockholders. That shared portion is the dividend.

You might wonder, then, why every stock doesn’t just pay monthly. For most large companies, processing payments to millions of investors is a significant administrative task. They find it far more efficient to handle this process four times a year. This is why monthly vs quarterly dividend stocks are so different; the quarterly schedule is the standard you’ll find across most of the market.

But that doesn’t mean your goal is out of reach. A small number of companies, often in specific industries, are structured to pass their income along to investors on a monthly schedule. We’ll cover what these companies are, where to find them, and the crucial ideas you need to understand to invest safely.

Why Most Stocks Only Pay Dividends 4 Times a Year

If you’ve started looking into dividend stocks, you’ve likely noticed a pattern: very few of them send out payments every month. The reason is simpler than you might think. For a large company with millions of investors, processing and sending out a dividend payment is a major administrative job. It costs real time and money to make sure every single shareholder gets the correct amount.

To make this process more efficient, the vast majority of companies adopt a quarterly dividend schedule. This means they pay shareholders four times a year, typically once every three months. This rhythm often aligns with how businesses track and report their financial performance, making it a natural time to distribute profits. It has simply become the standard practice across the stock market.

This is why finding stocks that pay every month can feel a bit like a treasure hunt. But they do exist. The companies that offer monthly payouts are usually a special breed, often in industries like real estate where collecting monthly income (like rent) is central to their business. Their unique structure is what allows them to pass that income along to you more frequently.

Where to Find the Companies That Pay Monthly Dividends

So, if most companies pay quarterly, where exactly do you look for these monthly payers? The answer usually isn’t in big, familiar brands like Apple or Coca-Cola. Instead, you’ll find them in two specific corners of the investment world: Real Estate Investment Trusts (REITs) and Business Development Companies (BDCs). These companies are structured differently and are often legally required to pay out most of their income to shareholders, making frequent payments part of their DNA.

The most common type is the Real Estate Investment Trust (REIT). Imagine you and your friends pool your money to buy an apartment building. The rent you collect each month is your income, which you then share. That’s essentially how a REIT works. It’s a company that owns and operates properties that collect rent, like shopping malls, office buildings, or medical centers. Because their income arrives monthly from tenants, it’s natural for them to pass that cash along to their investors every month, too.

A classic example of this is a company called Realty Income, which actually trademarked the name “The Monthly Dividend Company.” It owns thousands of single-tenant commercial properties that you see every day, like Walgreens drugstores and 7-Eleven convenience stores. When you look up a company on a stock exchange, you use its unique code, called a ticker symbol. For Realty Income, the ticker symbol is simply “O.”

Another group to know is Business Development Companies (BDCs). Think of them as investment firms that lend money to small and mid-sized businesses, much like a bank does. Just as REITs collect monthly rent, BDCs collect monthly interest payments on the loans they’ve made. This steady, predictable stream of cash allows many of them to also pay dividends to their shareholders every month.

3 Examples of Monthly Dividend Payers for Your Watchlist

Now that you know where to look for monthly dividend payers, let’s put a face to the name. Seeing real-world examples can make these concepts much clearer. Remember, this is not a shopping list. Instead, think of these as popular companies you can add to a “watchlist” to study as you learn more.

A great place to start is with the REIT we mentioned earlier, Realty Income (Ticker: O). Known as “The Monthly Dividend Company,” its business model is easy to grasp. It owns thousands of standalone commercial buildings—like your local Walgreens, 7-Eleven, or Dollar General—and collects rent from these reliable tenants. A portion of that rent is then paid out to its investors each month.

Another popular example in the REIT space is STAG Industrial (Ticker: STAG). This company focuses on a different but equally important type of property: industrial buildings and warehouses. With the growth of e-commerce, companies like Amazon need massive distribution centers to store and ship goods. STAG owns many of these facilities, giving it a steady stream of rental income to fund its monthly dividend.

But what if you don’t want to rely on the success of just one company? This is where an Exchange-Traded Fund (ETF) comes in handy. An ETF is like a pre-made basket containing dozens or even hundreds of different stocks. This gives you instant diversification—the investing version of not putting all your eggs in one basket. The Invesco S&P 500 High Dividend Low Volatility ETF (Ticker: SPHD), for example, is a monthly-paying ETF that holds a collection of stocks chosen for their high dividends and historically stable prices.

Seeing these examples helps illustrate how you can generate monthly income from either a single company or a diversified bundle. Of course, this probably has you asking the most important question of all: how much money can you actually earn from these investments?

How Much Money Can You Actually Earn from Monthly Dividends?

To figure this out, you need to understand dividend yield. Think of it like the interest rate on a savings account, but for stocks. It’s a percentage that shows how much cash a company pays out in dividends each year compared to its stock price. A stock with a 5% dividend yield, for example, aims to pay you $5 per year for every $100 you have invested in it. This percentage is the single most important number for estimating your potential income.

Let’s use a simple example. If you invested $1,000 into a monthly dividend stock with a stable 5% yield, you would earn about $50 over the entire year. Since the company pays monthly, you would divide that by 12, giving you a payment of roughly $4.17 each month. It’s not enough to retire on, but it’s a tangible return that can cover a small bill or be reinvested to grow over time.

This might not sound like a lot, which naturally leads to the question: “Why not just find a stock with a massive 15% or 20% yield?” While tempting, an unusually high yield can often be a warning sign, like a check engine light on a car. A dividend that seems too good to be true often is, and it’s crucial to understand why.

The #1 Trap to Avoid: Why a Super-High Dividend Isn’t Always a Good Thing

That temptation to chase a massive 15% or 20% dividend yield is completely normal. After all, more income sounds better, right? However, an extremely high yield often acts as a warning light for serious underlying risks. It’s a sign that you need to look closer before getting too excited.

This exact scenario has a name: the yield trap. Think of it like a bargain on a house that you later discover has a badly cracked foundation. The low price was a sign of a deeper problem. Similarly, a stock’s dividend yield can get pushed sky-high when its price falls dramatically. And why does the price usually fall? Because investors are worried the company is in financial trouble and won’t be able to afford its dividend payments for much longer.

When a company’s troubles become too much, it often has to make a tough choice to save money. One of the first things to go is that dividend payment. This is called a dividend cut, and it’s a double blow for investors. First, your expected monthly income suddenly shrinks or disappears completely. Second, the bad news almost always causes the stock’s price to fall even further. You can lose both your income stream and a chunk of your original investment at the same time.

This is why simply chasing the highest number can be so dangerous. Instead of asking, “Which stock pays the most?”, a safer question is, “Which healthy company can afford to pay me reliably?” While some of the most famously reliable dividend payers (sometimes called Dividend Aristocrats) only pay quarterly, you don’t have to give up on your monthly goal. The key is to shift your focus from high yield to company quality.

How to Build a Monthly Income Stream the Safer Way

So, if chasing the highest-paying stock is risky, what’s the safer path to monthly income? The single most important principle is to avoid putting all your eggs in one basket. Relying on just one or two companies for your monthly dividend payments is like balancing your entire investment on a tightrope—if one company falters, your income stream could be in jeopardy.

This core safety strategy has a simple name: diversification. Imagine instead of buying just one type of fruit, you buy a whole basket containing apples, oranges, and bananas. If you discover one of the apples is bruised, you still have plenty of other good fruit to enjoy. Diversification in investing works the same way. By spreading your money across many different companies, you reduce the risk that a problem in any single one will have a major impact on your overall investment.

Thankfully, you don’t have to spend hours researching and buying dozens of individual stocks to achieve this. A fantastic tool for building a dividend portfolio for beginners is a monthly dividend ETF (Exchange-Traded Fund). Think of an ETF as a pre-packaged basket of stocks. By buying just one share of a monthly dividend ETF, you instantly become a part-owner in many different companies that all pay monthly dividends.

This approach gives you the best of both worlds: you get the regular monthly income you were looking for, but with the built-in safety of diversification. Over time, you can even choose to reinvest those payments to slowly grow your stake, which helps with compounding returns with dividend reinvestment. It’s a powerful and responsible way to work toward your goal.

Your Next Steps to Earning Passive Income

You began by asking which stocks pay monthly dividends, but now you can do much more than just find a name on a list. You can spot the difference between a healthy company and a potential “yield trap,” giving you the confidence to evaluate your options instead of just taking a suggestion.

This knowledge is your foundation. To start building on it safely, use this simple three-step plan:

1. Prioritize Company Health: A stable business is always a better choice than the highest-possible dividend yield.
2. Make Diversification Your #1 Rule: Owning a mix of investments is the best way to protect your money as you start.
3. Take the Right Next Step: Your immediate goal isn’t buying a stock, but learning how to open a brokerage account.

The goal is no longer just about how to find companies that pay monthly dividends. You now have the first principles for building a dividend portfolio for beginners. This is how you truly start generating passive income with dividend stocks—not by chasing a single monthly payment, but by confidently taking one safe, educated step at a time.