The Motley Foolยท2025-10-31 08:05Core Viewpoint - The article discusses two primary methods for generating monthly income through investments, focusing on the advantages of monthly dividend-paying stocks like Realty Income and Agree Realty over quarterly dividend payers [1]. Group 1: Monthly Income Generation - Investors can either buy multiple quarterly dividend stocks to create a monthly income stream or opt for investments that pay monthly dividends [1][3]. - Managing three different quarterly dividend stocks can be complex, requiring careful tracking to ensure a steady income stream [3][4]. Group 2: Monthly Dividend Stocks - Monthly paying dividend stocks are less common, necessitating careful selection to ensure they are sound investments [4]. - AGNC Investment, while offering a high yield of 14%, has a declining dividend history and stock price, highlighting the importance of understanding the underlying investment [5][7]. Group 3: Realty Income and Agree Realty - Realty Income and Agree Realty are traditional property-owning REITs that utilize a net-lease approach, minimizing operational costs for tenants [8]. - Realty Income has a portfolio of over 15,600 properties, while Agree Realty has around 2,600 properties, making Realty Income the larger player in the market [9]. Group 4: Financial Metrics - Realty Income offers a dividend yield of 5.4%, while Agree Realty has a yield of 4.2%, both significantly higher than the S&P 500's yield of approximately 1.2% [11]. - Realty Income has increased its dividend annually for 30 years, whereas Agree Realty has a 10-year streak with a shift to monthly payments in 2021 [11]. Group 5: Growth Potential - Realty Income's dividend has grown by about 30% over the past decade, while Agree Realty's dividend has increased by 60% during the same period, indicating a stronger growth trajectory for Agree [13]. - Given its smaller portfolio, Agree Realty may find it easier to sustain higher growth rates compared to Realty Income [13]. Group 6: Investment Strategy - Realty Income and Agree Realty are considered reliable income stocks that can serve as foundational investments, with the potential for adding more aggressive income options [14].