8 Best Monthly Dividend Stocks to Buy Now

Part of the reason many people like income investments is because they can treat the regular distributions as a kind of "paycheck" in retirement. After all, even if you have $1 million in the bank, you can only live off it as long as there's money to withdraw. Instead, income investing in dividend stocks provides a profit-sharing arrangement where companies pay you regularly without drawing down any capital from your nest egg. And in some cases, these dividend stocks even pay you every 30 days instead of the usual once per quarter – allowing even more reliability in your family budget. If the regularity of monthly dividend stocks appeals to you, consider these eight picks.

While shares are mostly flat so far in 2021 after giving up prior gains made in the summer months, Dynex is still a monthly dividend stock to watch. That's because it has delivered 13-cent dividends every month to shareholders this year to deliver a huge return through its income stream alone. Like a few other monthly dividend stocks on this list, these dividends are driven by Dynex's structure as a real estate investment trust, or REIT. This special kind of publicly traded stock has to deliver 90% of its taxable income back to shareholders via dividends. Unlike some of the other REITs out there, however, DX doesn't deal with physical property and instead invests in mortgage-related securities including federally guaranteed loans through Fannie Mae and Freddie Mac. Unfortunately, volatility in the interest rate environment has created volatility for many mortgage-related stocks from a share perspective. But as the current yield proves, the income potential of this monthly dividend stock is still there in a big way.

Dividend yield: 9%

EPR Properties is another REIT, but unlike the aforementioned Dynex, it does indeed own physical properties. Specifically, EPR is a commercial real estate firm that has stakes in entertainment-oriented locations including movie theaters, resorts and casinos. This is a great business model right now as the American public becomes more comfortable with traveling and some pandemic restrictions start to ease, and EPR is well run because it manages triple net leases with venue operators that require tenants to cover upkeep, insurance and taxes. Admittedly, this monthly dividend stock only recently resumed its payouts this summer after it moved past the worst of pandemic disruptions. But the annualized yield based off its 25-cent paydays adds up significantly.

Dividend yield: 6.2%

Gladstone Commercial is structured as a REIT, but has a large portfolio of logistical and light industrial properties as well as commercial real estate holdings. That makes it less focused on residential trends or mortgage rate changes than other REITs out there, but it still boasts big monthly dividend potential. The company has a roughly 50-50 split between industrial and commercial properties across nearly 130 sites, adding a nice diversification to its operations. Gladstone Commercial has also been one of the most consistent monthly dividend stocks on Wall Street, with no interruptions in distributions since 2005 – including both the pandemic and the financial crisis more than a decade ago. That's a tremendous track record on which long-term investors can rely.

Dividend yield: 6.5%

As the name implies, Horizon is a financing and investing company that primarily targets the tech sector. The footprint of this company is decidedly focused on life sciences and biotechnology instead of traditional Silicon Valley outfits. Examples of HRZN's investments include rare disease treatment provider Castle Creek Biosciences and respiratory device manufacturer CSA Medical. These kind of development-stage drug companies or specialized medical device companies come with risk, but they can be lucrative if and when they succeed in their niches. And thanks to a diversified portfolio that helps smooth out some of the volatility in individual investments, HRZN is up 35% year to date including dividend payments to outperform the S&P 500.

Dividend yield: 7.2%

Main Street Capital has been on a tear lately, rising about 49% including dividends this year. It's a midsize financial firm, providing debt and equity investments into smaller companies with the goal of consistent returns for its shareholders. MAIN has a broad and diversified portfolio that includes a digital marketing company, a hose manufacturer, a coffee shop chain and a wide array of other small and midsize operations. Thanks to a broader economic recovery that has lifted many of these small businesses over the last year, the stock has done quite well and its 21-cent dividends have rolled in every month on a steady schedule.

Dividend yield: 5.8%

PennantPark is an interesting monthly dividend stock to consider right now, given that many observers think interest rates will rise soon. PFLT operates as a lender to troubled companies, putting up its capital at high interest rates to offset the higher levels of risk associated with these businesses. As you can imagine, a lot of companies fell on hard times during the pandemic and PennantPark made some shrewd and strategic investments during that time. What's more, its floating-rate loans actually adjust up as the broader rate environment does – meaning that if and when rates rise, PFLT will see even bigger interest payments. This monthly dividend stock is up about 36% including dividends so far this year and offers one of the highest yields on this list to boot.

Dividend yield: 8.7%

Prospect Capital is a monthly dividend stock that invests in other businesses and then passes on a share of the profits to investors. And lately, the PSEC portfolio has shown a lot of potential according to Wall Street. The stock is up about 69% including dividends this year, along with strong fiscal first-quarter earnings posted at the beginning of November that featured an earnings beat and robust investment income. The long-term appeal for dividend investors, however, is the generous yield and monthly payouts fueled by a portfolio of debt and private equity investments. PSEC takes a piece of the action in companies that range from candle manufacturers and specialty finance firms to media and IT service providers. As these investments pay off across a well-diversified group of holdings, Prospect enjoys fairly consistent revenue and consistent monthly dividends.

Dividend yield: 8.4%

Stellus Capital took a big tumble about a year ago as dividends dropped from about 31 cents to 10 cents per month. But this financial stock has seen its share price recover in a big way, from lows of less than $10 for much of 2020 to about $13 per share at present. SCM focuses on investments in private middle-market companies and invests through first lien and "unitranche" financing, meaning it is the only lender in a debt offering and thus gets more control over payment terms. There's admittedly risk in the corner of the market SCM serves, as so-called lower-middle market companies don't have the deep pockets or entrenched operations of multinational blue-chip stocks. But that allows this monthly dividend stock to command a better premium on its loans and bigger dividends as a result.

Dividend Yield: 8.6%

• Dynex Capital Inc. (DX)
• EPR Properties (EPR)
• Gladstone Commercial Corp. (GOOD)
• Horizon Technology Finance Corp. (HRZN)
• Main Street Capital Corp. (MAIN)
• PennantPark Floating Rate Capital (PFLT)
• Prospect Capital Corp. (PSEC)
• Stellus Capital Investment Corp. (SCM)