Dividends are great, especially if you need income to help cover your current living expenses. But the way dividends are paid isn’t always convenient. Most dividend stocks only dish out payments once per quarter. You most likely pay your bills on a monthly basis. It would be nice if this money was coming in at the same rate it was going out.

While it’s relatively uncommon, there are some stocks that pay their dividends on a monthly rather than a quarterly schedule. Here’s a closer look at three of the better ones you may want to consider adding to your portfolio.

Realty Income

If you’re looking for a stock that pays a recurring monthly dividend, it makes sense to own a stake in a company that charges its customers on a recurring monthly basis.

Enter Realty Income (NYSE: O). It’s a real estate investment trust (REIT). That just means it owns rental real estate.

There are all sorts of REITs, specializing in everything from malls to apartment buildings to hotels to office space. Realty Income’s focus is retailing. It owns 15,450 different retail properties, 98.8% of which are currently rented out to more than 1,500 different consumer-facing companies. Its top tenants right now include Dollar General, Walgreens, and Dollar Tree, but Walmart, 7-Eleven, and FedEx are also key renters.

On the surface, it’s a concerning specialty for would-be shareholders. The retailing industry is supposedly fighting for its life, defending itself from the advent of online shopping.

However, some key players in this market will always stick around in brick-and-mortar form, with many of them being Realty Income’s tenants.

That’s what the numbers suggest, anyway. Not only is almost all of this REIT’s portfolio currently leased despite economic turbulence, it’s managed to pay a dividend every month since it was founded in 1969. Indeed, it’s not only been able to raise its full-year dividend payouts every year for the past 30 years, but it’s upped its monthly payment every three months for the past 107 quarters. Not bad.

Newcomers will be stepping into Realty Income while its forward-looking yield is just a little over 5%.

Stag Industrial

Like Realty Income, Stag Industrial (NYSE: STAG) is a REIT. Its forward-looking yield of 3.7% is also in the same ballpark as Realty Income’s, even if it’s measurably lower. It is different from Realty Income in one key way. Whereas Realty Income’s focus is on retail properties, Stag Industrial — just as the name suggests — largely owns industrial rental real estate.

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The term “industrial” could be a little misleading here. The company doesn’t own a bunch of factories or production facilities. The bulk of its business and its tenants are consumer-oriented. Amazon is its biggest tenant, for instance, mostly renting warehouse space. The Coca-Cola Company is another major renter, along with FedEx. Most of its tenants use space rented from Stag Industrial for logistics, storage, delivery, and warehousing purposes.

Whatever the case, it works. As of this year’s midpoint, more than 97% of its 114.1 million square feet for rent was rented — at strong prices, too. This REIT is generating plenty of income to cover its ever-growing dividend payments. Although sometimes at a painfully slow pace, Stag’s raised its dividend payment every year since 2011. This year should be no exception.

There’s another great reason to consider stepping into a stake in Stag Industrial… a reason that’s rarely touted. That is, while REITs are well-suited for paying dividends, Stag also aims to drive meaningful price appreciation of its shares. Much of this growth will come from sales of previously purchased properties that have been developed, improved, or grown in value, or that no longer fit within its portfolio.

The strategy doesn’t always work. It works more than it doesn’t, though. Stag shares are up nearly 100% for the past decade, thanks to consistent (albeit volatile) long-term progress.

AGNC Investment

Finally, add AGNC Investment (NASDAQ: AGNC) to your list of tickers that pay a monthly dividend.

Yep, it’s another REIT, although still distinctly different than Stag or Realty Income. AGNC Investment is a mortgage REIT, meaning it buys bundles of mortgage loans — which essentially trade like bonds — facilitated by government agencies like the Federal National Mortgage Association (Fannie Mae). The quirk? It borrows money to make these purchases, paying shareholders most of the difference between what it’s got coming in every month and what’s going out.

It sounds odd at first… paying interest on borrowed money to earn interest on, well, borrowed money. Surprisingly enough, though, the model usually works. That’s because the interest costs on the short-term funds borrowed to buy bundles of long-term loans are typically lower than the interest earned on the bundled loans themselves. These are also highly leveraged purchases, so even the relatively small difference between AGNC’s borrowing costs and its return on ownership of the mortgages it owns are effectively magnified.

Usually, but not always.

As of the middle of 2022, long-term interest rates fell below short-term interest rates. You likely heard this rare phenomenon referred to as an inverted yield curve. It often happens in anticipation of economic or market weakness, marked by investors leaving stocks and plowing into anything seemingly safer.

Mortgage REITs like AGNC Investment can typically shrug it off if the yield curve doesn’t remain inverted for too long. This curve remained inverted for a couple of years, wreaking havoc on AGNC’s business model in the meantime. That’s the chief reason this stock’s been such a poor performer since then.

The yield curve is no longer inverted, and if the impending rate cuts work as expected, the yield curve will remain uninverted as demand for mortgage loans is rekindled. That’s exactly what AGNC and its shareholders want to see.

AGNC Investment’s projected dividend yield stands at an incredible 14% right now, but don’t get too excited. That could easily change as the economic backdrop evolves. That’s why this REIT shouldn’t be your first or only monthly dividend stock.

If you’ve got room for a little uncertainty and inconsistency among your dividend-paying holdings, this above-average yield may well be worth the risk.

Should you invest $1,000 in Realty Income right now?

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James Brumley has positions in Coca-Cola. The Motley Fool has positions in and recommends FedEx, Realty Income, Stag Industrial, and Walmart. The Motley Fool has a disclosure policy.

3 Stocks That Cut You a Check Each Month was originally published by The Motley Fool