Dividend stocks are a great way to start earning passive income. However, a minor downside to most dividend stocks is that they only cut checks quarterly. Because of this, the dividend income may be somewhat lumpy.

One solution to this problem is to buy stocks with monthly dividends. Three great monthly payers to consider are OK Real Estate (NYSE: ADC), Gladstone Land (NASDAQ: EARTH), and Pembina pipeline (NYSE: PBA).

Receive rental income without any work

Agree Realty is a real estate investment trust (REIT) which owns a portfolio of independent commercial properties. As retailers face the headwinds of e-commerce, Agree Realty focuses on very specific tenants, allowing it to generate stable rental income.

First, it focuses on leasing space to essential retailers less likely to be disrupted by e-commerce. Its major tenants include grocery stores, home improvement stores, auto and tire repair centers, convenience stores, dollar stores and drugstores. In addition, it mainly focuses on retailers with a higher credit rating (68% of its rental income comes from IG-rated retailers), which suggests that they have the strength to meet their financial obligations in the event of a loss. economic downturn. Finally, Agree Realty uses triple net leases, where the tenant takes responsibility for property taxes, building insurance and maintenance.

Meanwhile, the REIT complements its strong portfolio with a strong financial profile, including an investment grade credit rating and a dividend payout rate for a REIT. These factors give Agree Realty the financial flexibility to expand its portfolio. This steady growth has allowed the REIT to steadily increase its dividend, which it began paying monthly earlier this year. Agree Realty has increased its payments at a compound annualized rate of 5% over the past 10 years and is expected to be able to continue to increase it in the future as it acquires more standalone retail properties generating cash flow. At 3.6% dividend yield, Agree Realty is an excellent income stock.

A constantly increasing dividend

Gladstone Land is also a REIT. She specializes in owning farmland and farm-related facilities that she rents out to farmers in triple net. The company mainly buys from farms used to grow healthy foods like fruits, vegetables and nuts. These crops tend to generate more stable income for farmers than commodity products like corn, soybeans and wheat.

Gladstone has continuously developed its portfolio of farmland by acquiring new properties. It purchased 13 farms and more than 20,000 acre-feet of reserve water for $ 79.7 million in the second quarter. These farms are expected to generate steadily growing rental income due to annual rent increases, CPI adjustments or participation rents (a share of crop profits). This year, the company began acquiring water rights to reduce the risk of draft for some of its farms. This should help to further stabilize its rental income.

Gladstone’s growing agricultural portfolio has allowed it to steadily increase its dividend. The REIT has increased its payout in 23 of the last 26 quarters, increasing it overall by 50.3%. The company aims to continue increasing its dividend at a rate above inflation, thanks to the constant increase in rents and new acquisitions of farms. With a dividend yield of 2.4%, Gladstone offers an above average monthly income.

A constant stream of dividends

Pembina Pipeline is a Canadian energy company infrastructure company. It operates pipelines, processing plants, storage terminals and export facilities. The company, in a sense, operates an energy toll station, collecting a constant stream of royalties as oil and gas flow through its integrated system. This stable cash flow supports Pembina’s 6.1% monthly dividend.

As concerns about climate change force the global economy to shift towards cleaner alternatives, this energy transition will take decades. For this reason, demand for oil and gas will continue to grow over the next several years, providing Pembina with additional opportunities to expand its energy infrastructure footprint. The company has more than $ 1 billion in commercially secured expansion projects under construction or ready to go. In addition, it has billions of dollars in potential expansion projects further down the pipeline.

One notable project is the Alberta Carbon Grid, a joint venture with another Canadian energy infrastructure company. TC Energy build a global carbon dioxide transport and sequestration system in Western Canada. Projects like this will help reduce the energy industry’s carbon footprint. Meanwhile, Pembina is exploring other cleaner alternatives like wind power, cogeneration and hydrogen.

Future investments (organic expansions and acquisitions) should give Pembina the fuel to continue increasing its dividend. Although the company has not increased its dividend since early 2020 due to the pandemic, it had a long history of steady dividend growth before this hit. As market conditions improve and their current list of expansions goes live, Pembina should be able to start increasing their monthly payments again.

Great options for monthly income

Monthly dividend stocks make it easier to earn passive income that you can use to offset a regular expense. While only a small group of stocks cut checks each month, investors have attractive options in Agree Realty, Gladstone Land, and Pembina Pipeline. All three companies offer dividend yields well in excess of S&P 500 and have a history of steadily increasing their payments.