3 Dividend Stocks That Could Double Your Monthly Income

Even though growth stocks are back to performing well in recent weeks, it’s a good idea to look into dividend stocks. There are still fears in the market. Goldman Sachs has lowered their recession risk to 30%, but even that is quite significant and could rise back up if tariff pauses that are in place right now expire without comprehensive deals with major trade partners.

Moreover, at least one interest rate cut by the Federal Reserve is expected this year, with more likely to come in next year and beyond. Dividend stocks will benefit from lower interest rates as investors get hungrier for yield.

Monthly dividend stocks should be near the top of your list, since not only do they benefit from the tailwinds, they also pay you monthly, which you can use if tough times do come around. If you invest enough in them, they could even double your monthly income.

Here are three to look into:

Realty Income (O)

Realty Income (NYSE:O) recently declared its 659th consecutive monthly increase with dividends at $0.2685 per share. The current yield of 5.85% is much better than what the S&P 500 collectively provides. It is also better than what treasuries currently pay.

O stock has underperformed in recent months and is flat in the past year. However, it has outperformed the S&P 500 year–to-date with a 4.6% gain and should continue to do so if the rest of the market faces more headwinds.

It is hard to discuss monthly dividend stocks without Realty Income. It is called “The Monthly Dividend Company” due to how far back its dividend track record goes. The underperformance in recent years is less tied to a problem with the company itself and more due to the fear regarding the broader market.

Since the Great Recession, real estate is now seen as a highly risky sector to bet your money, and investors have avoided it whenever there’s uncertainty in the market. That’s despite the fact that real estate companies have learned a lot since then and are much safer investments.

Regardless, However, much of this concern appears already priced in. A real estate crash has also failed to materialize. Realty Income has kept its solid occupancy through COVID and the Great Recession. The Great Recession caused occupancy to drop to only 96.6%. Otherwise, it has been around 97-98%. The portfolio composition leans more toward defensive companies, so I see this as one of the most defensive REIT investments you can make.

Healthpeak Properties (DOC)

Healthpeak Properties (NYSE:DOC) is a healthcare-focused REIT and S&P 500 component. It has underperformed the broader market for the past few years and is down over 21% in the past five years. Even despite the underperformance, I think the yield is hard to overlook, and there’s a good chance of the stock bottoming out soon.

The entire healthcare sector is seeing outflows recently due to President Donald Trump’s executive order that pledges to cut drug costs from 30% to 80%. These fears have translated into DOC stock as well, but I don’t think it will lead to a significant downside from here.

The FFO-based payout ratio is at 67% and comfortably covers the dividend payouts here. Dividends have declined recently, but it should gradually improve as the company turns a corner.

Revenue has been rising, and while the bottom line hasn’t cooperated in recent years, that’s mainly due to the debt. Debt is at nearly $9.2 billion, and the company reported a net interest loss of $280.4 million in the last fiscal year. In comparison, net income was $243.1 million. As interest rates eventually come down, this should lead to a significant boost in the bottom line and cause the stock to climb back up.

Still, I don’t expect it to happen anytime soon. A full recovery back to pre-pandemic levels will require ultra-low interest rates like we had back then. A partial recovery to $20-25 can still happen in the next 24 months. In the meantime, you can sit on the monthly dividends here.

It switched its dividend frequency from quarterly to monthly this April. The company stated that this change was made to give “ investors more consistent cash flow and better alignment with the timing of our rental income”.

Global Water Resources (GWRS)

Global Water Resources (NASDAQ:GWRS) may not look special on paper. The dividend yield is only around 3%, and it’s a pretty small company. But it is indeed quite special. When you look for monthly dividend stocks, you’ll find that the overwhelming number of companies that pay monthly are either REITs, or they are involved with lending, or are in the financial sector in general.

GWRS is one of the only utility stocks paying monthly. You’ll receive both monthly payments and the stability that comes with regulated utility companies. In the current environment, the utilities sector is one of the safest places to invest. Utility companies are almost entirely outside the purview of tariffs. Plus, these companies are involved in essential services people can’t cut back on in a recession.

GWRS stock has declined 21.4% in the past year due to a decline in revenue and earnings. But EPS is expected to bounce back by 27.3% next year after an 8.3% decline this year. Sales are also expected to continue growing by 5-6% annually after a slight decline in 2024.

Some don’t like the valuation here at around 43 times earnings, but investors have historically paid nearly 60 times earnings here due to how unique this stock is. The company also operates in Arizona, where there is a water scarcity problem. Groundwater supply in the Phoenix area is projected to fall short of demand by 4.9 million acre-feet over the next century, and this is where Global Water Resources’ operations are located.

As such, regulators are likely to keep approving more rate increases. Plus, the company could expand significantly if it lands a government contract to deal with the water scarcity problem.

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