3 Stocks That Cut You a Check Each Month

Key Points

• Realty Income is a net-lease giant with a high yield and a 30-year dividend history.

• Agree Realty is a smaller net-lease REIT focused on growth and has increased its dividend for a decade.

• LTC Properties is a healthcare REIT that is leaning into a key growth platform.

• 10 stocks we like better than Realty Income ›

When you shift from building a nest egg to living off of your savings in retirement, there may also be a big change in the investment approach you take. Income often becomes more important since leaving the workforce means you need to replace the monthly income stream from your job. Monthly dividend-payment companies like Realty Income (NYSE: O), Agree Realty (NYSE: ADC), and LTC Properties (NYSE: LTC) can help.

1. Realty Income is the net-lease giant

Realty Income has a dividend yield of 5.6%. The real estate investment trust (REIT) has increased its dividend annually for three consecutive decades. And within that streak is a streak of 110 quarterly increases. The dividend is paid monthly.

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Realty Income is a slow and steady dividend tortoise, partly because it is nearly four times the size of its nearest competitor. It simply requires more acquisition activity to grow a large REIT. However, given the lofty yield, that probably won't bother income investors when you juxtapose that fact against the long history of dividend hikes.

Realty Income's focus is largely on single-tenant, net-lease retail assets (a net lease requires the tenant to pay for most property-level expenses), but it also owns industrial properties. Its portfolio spans from the United States to Europe as well. In other words, it is highly diversified. If you are looking for a high-yield stock that pays monthly, Realty Income should be on the top of your list.

Image source: Getty Images.

2. Agree Realty is focused on growth

Agree Realty has a 4.2% dividend yield. It has increased its dividend annually for a decade. Like Realty Income, Agree pays its dividend monthly. And also like Realty Income, Agree is a net-lease REIT.

Where Agree differs from Realty Income is its size and focus. Agree's market cap is about $8 billion versus Realty Income's $52 billion. Where Realty Income is diversified across property type and geography, Agree is focused 100% on net-lease retail assets and only buys within the United States. That said, the REIT's smaller size makes growth easier to achieve. Still offering a lofty yield with a monthly pay dividend, more growth-oriented investors will probably prefer Agree over Realty Income.

3. LTC Properties survived the COVID storm

LTC Properties shifts the gears a little bit, given that it is a healthcare REIT. It has a nearly 6.6% dividend yield, but it hasn't increased its dividend in years. That, however, is actually a sign of strength for this monthly pay REIT.

LTC Properties owns senior housing properties, including nursing homes and assisted living assets. During the COVID-19 pandemic, these assets were under massive pressure, but LTC Properties managed to weather the storm in stride with no dividend cut. Many of its peers didn't achieve that same success. Now that the storm has passed, however, there's a growth opportunity in serving a rapidly growing senior population.

There's a growth kicker here, however, because LTC Properties has been adding senior-housing-operated properties (SHOP) to its portfolio. These are assets that LTC owns and operates (it actually hires a property manager), so the financial results of SHOP assets drop directly to the top and bottom lines. It is, basically, leaning into the growing demand from the senior population. For more aggressive investors, this could be an interesting monthly pay dividend option.

Buying monthly pay stocks is like buying a paycheck

The big draw for monthly pay stocks is, clearly, the regular income stream they provide. That said, you shouldn't buy a stock just because it pays monthly. Make sure that you like the business that backs the dividend. Realty Income, Agree Realty, and LTC Properties all have attractive yields and attractive businesses for those searching for a way to replace their paycheck in retirement.

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Reuben Gregg Brewer has positions in Realty Income. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.