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3 Top Monthly Dividend Stocks: Comparing Safety, Growth, and a Blend of Both

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Monthly dividend stocks are appealing to investors seeking regular income. In this article, we will analyze three top monthly dividend stocks: Main Street Capital (NYSE: MAIN), Realty Income Corporation (NYSE: O), and Agree Realty Corporation (NYSE: ADC). Each of these stocks offers unique advantages and may appeal to different types of investors. Read on to find out more about their financial performance, growth prospects, and potential risks.

Main Street Capital: A Robust Dividend Performer

Main Street Capital is widely regarded as one of the top Business Development Companies (BDCs). BDCs are known for their income-generating potential, as they are required to distribute at least 90% of taxable income to shareholders in the form of dividends. This often translates into attractive yields.

MAIN has a strong track record of consistently paying dividends and even offers special dividends on a regular basis. The company weathered the storm during the Great Recession and the COVID-19 crisis without cutting its dividend, a testament to its stability and management expertise.

Over the years, MAINโ€™s net asset value (NAV) has grown significantly, providing a solid foundation for long-term investors. The stock has also outperformed the S&P 500, as demonstrated by its impressive total returns.

MAIN boasts a diverse portfolio and focuses on first-lien debt investments. The companyโ€™s debt profile is healthy, with well-laddered maturities and investment-grade credit ratings. Analysts expect the companyโ€™s EPS to increase in the coming years, further enhancing its growth potential.

All these factors make MAIN an attractive investment option, especially considering the current valuation, which some may consider a bargain.

Key points:

  • Main Street Capital is a reputable BDC with a strong dividend history.
  • The companyโ€™s NAV has consistently grown, providing attractive total returns.
  • MAIN has a diverse portfolio and a healthy debt profile.
  • Analysts forecast an increase in EPS for MAIN in the coming years.

Realty Income Corporation: Stability and Dividend Growth

Realty Income Corporation is a stalwart in the stock market. This REIT has a solid reputation for providing stable and growing dividends, even during challenging economic periods. Realty Incomeโ€™s ability to raise its dividend during the COVID-19 crisis showcased its resilience and strong financial position.

The company has a long history of dividend growth, outpacing the average REIT in the S&P 500. Realty Incomeโ€™s portfolio is well-diversified across the United States and internationally, with high-quality tenants from various industries. With a focus on recession-resistant and e-commerce-resistant clients, Realty Income is positioned to withstand economic downturns and changes in consumer behavior.

Realty Income has investment-grade credit ratings and a healthy debt profile. The company predominantly finances itself with fixed-rate debt, reducing its exposure to rising interest rates. With a current yield above 5% and a history of consistent dividend growth, Realty Income offers an attractive income opportunity.

Key points:

  • Realty Income has a strong track record of stable dividend growth.
  • The companyโ€™s portfolio is well-diversified and includes high-quality tenants.
  • Realty Income has investment-grade credit ratings and a healthy debt profile.
  • The stock is currently trading at a discount, presenting a potential buying opportunity.

Agree Realty Corporation: Growth and Resilience

Agree Realty Corporation is a relative newcomer in the monthly dividend stock space, but it has quickly gained attention due to its growth potential. Like Realty Income, ADC is a triple-net lease REIT, where tenants assume responsibility for property expenses.

ADC has a large property portfolio and a weighted average lease term of approximately 8.8 years. The company prioritizes recession-resistant and e-commerce-resistant clients, ensuring stability even in challenging economic times. Additionally, ADCโ€™s ground lease platform provides additional diversification and attractive long-term leases.

The companyโ€™s credit ratings are investment-grade, and it has well-laddered debt maturities. ADC offers a current yield of over 5% and has a solid track record of dividend growth.

With a smaller portfolio compared to Realty Income, ADC has greater growth potential. The companyโ€™s focus on quality properties and diversified tenant mix positions it well for market-beating growth.

Key points:

  • Agree Realty Corporation has shown strong growth potential and resilience.
  • The companyโ€™s property portfolio is diversified and includes long-term leases.
  • ADC has investment-grade credit ratings and well-laddered debt maturities.
  • The stock offers a current yield of over 5%.

Comparison and Conclusion

When comparing these three monthly dividend stocks, itโ€™s important to consider your investment goals and risk tolerance.

Main Street Capital offers a combination of safety and growth potential, with a history of robust dividends and solid financials. Realty Income provides stability and consistent dividend growth, making it an attractive choice for income-focused investors. Agree Realty offers a blend of growth and resilience, with a smaller portfolio that can potentially generate market-beating returns.

Ultimately, all three stocks present unique opportunities for investors seeking monthly dividend income. Itโ€™s important to perform thorough research, considering factors such as financial performance, dividend history, and growth potential, before making an investment decision.

Disclaimer: The author owns shares of Main Street Capital and Realty Income Corporation. The author may initiate a position in Agree Realty Corporation in the near future.

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