Dividend Investing: REITs

Without devoting much brainpower to the topic, it’s easy to understand the allure of monthly dividend stocks for investors. Who wouldn’t want to see dividend checks hit their account more frequently, right?

However, retirees covering expenses with dividends and investors in the accumulation phase covet these stocks and ETFs for more than just psychological reasons, including the high yields and targeted sector exposure, to name a few. Yet, despite these benefits, investor caution is needed, as there is no shortage of underperformers in the mix.

With this in mind, we compiled our list of the top monthly dividend stocks and ETFs, as it can be challenging to identify the true standouts.

Our shortlist of monthly dividend stocks to buy is based on select screening criteria that we apply to a universe of income stocks to identify reliable picks with consensus 'buy' and 'strong buy' ratings. For an extra margin of safety, our screens filter out any stocks that have negative price returns over the past five years.

While monthly income may be important, we also suggest considering dividend stocks that pay quarterly dividends. The universe of options increases for investors wanting to buy the best dividend stocks, or to find reliable payers with decades of rising payouts, such as dividend kings and dividend aristocrats.

There is a wealth of diversified options when investing in monthly income ETFs, including equity, derivatives, alternatives, and fixed income ETFs. We’ve compiled our list to include only equity, equity derivatives that utilize options strategies, and fixed income. Our ETF list below includes leaders in each category after taking into account assets under management, yield, and each fund's expense ratio.

Our list of the best dividend ETFs is also worth reviewing to discover other diversified investment vehicles that offer quarterly payouts.

Monthly dividend stocks are shares of companies that pay out dividends every month. These companies typically offer generous yields, which makes them a favorite among retirees who use dividends to cover monthly expenses.

Beyond their payout cadences and high yields, companies that pay monthly dividends almost always operate in the financials, energy, or real estate sectors.

These sectors have ideal characteristics for turbo-charged payouts. The combination of favorable macroeconomic factors yields steady cash flows and companies that prioritize distributing profits to shareholders, especially in the case of REITs, which are required to distribute at least 90% of their taxable income.

While many monthly dividend stocks offer generous payouts, that’s not the primary reason why investors flock to these securities.

For retirees, these dividend stocks provide a steady income stream that serves as a replacement for their paycheck.

There’s also a psychological component that explains the allure of monthly payouts. Seeing dividend checks hit your brokerage account monthly can be a rewarding experience that you don’t get when investing in stocks that pay dividends quarterly.

Other benefits exist as well. Monthly dividend stocks offer exposure to select high-yield and stable cash flow sectors. A more frequent payout cadence can also work wonders for dividend reinvestment and dollar-cost averaging strategies, as it increases the number of opportunities to compound growth and increase share counts during price declines.

However, there are also drawbacks to consider. It’s practically impossible to build a diversified portfolio consisting solely of monthly dividend payers since many companies operate in a concentrated number of sectors. Additionally, the high-yield nature of these dividend stocks leaves little room for payout increases and reinvestment in company growth, which limits the potential for future dividend and share price growth.

The range of investment strategies increases significantly when investing in monthly dividend ETFs instead of stocks. The one unifying characteristic of these dividend ETFs is that there are very few low-cost options, with most funds charging higher expense ratios than popular traditional index-based ETFs from Vanguard, Schwab, and others, which have expense ratios under 0.10%. It’s not uncommon for monthly dividend ETFs to have expense ratios of around 0.50%, with some charging as high as 3.0% to 4.0%.

With this in mind, let’s review the most common types of monthly dividend ETFs.

These ETFs are primarily market capitalization and style-based funds that invest directly in a basket of stocks, paying dividends on a monthly basis. The market capitalizations of stocks invested in range from small to large-cap, with most styles being heavily value-focused.

Equity-based ETFs also include a popular segment of funds that utilize equity derivatives to supercharge yields. These ETFs most commonly employ covered call option strategies, providing exposure to specific stocks, sectors, or indexes.

One example includes the ever-popular JPMorgan Equity Premium Income ETF (

) fund, which dominates topic coverage on Reddit's popular 

Taxes should be considered when investing in such derivatives ETFs, since income can be taxed at ordinary rates, which reduces the after-tax yield. Furthermore, select equity derivatives ETFs offer sky-high yields, which should raise some red flags to conduct more research.

Monthly dividend ETFs are also popular among bond investors seeking reliable income and diversification. There is a wide array of ETFs in this category, including funds that invest in corporate, municipal, and government bonds, ranging from ultrashort to long-term.

Outside of equity and fixed income ETFs, there are other options to consider when seeking monthly income.

Asset allocation ETFs invest in a mix of asset classes determined by risk.

Commodity ETFs in this category commonly invest in oil, gold, and silver.

Currency ETFs that pay monthly dividends offer exposure to individual currencies, whereas others provide exposure to cryptocurrencies.

Are monthly dividend stocks or ETFs better?

Investor-specific goals will ultimately determine the most suitable approach to generating monthly income, whether that’s through direct stock ownership or dividend ETFs.

Let’s start with ETFs. Investors seeking a buffet of options across asset classes and securities are best served by focusing on dividend ETFs rather than individual stocks.

Dividend ETFs can provide instant diversification, especially when cornering the equity-focused segment of monthly payers. The various small to large-cap equity-focused monthly dividend ETFs available offer exposure to broad market indexes, which you can’t access when investing in companies paying monthly dividends that are heavily concentrated in a small number of sectors.

Investors can also gain exposure to a wide range of asset classes and strategies with ETFs that pay monthly. These include exposure to fixed income, currency, derivatives, and commodity asset classes, as well as long or short strategies.

On the other hand, investing directly in individual monthly dividend stocks has select advantages, particularly for investors targeting exposure in the financial, energy, and real estate sectors.

However, successful stock picking takes years of experience. It demands a steady hand and a long-term mindset, with many seasoned investors never forgetting the sting of their likely numerous investing mistakes that turned into lessons learned.

Deciding between dividend ETFs and stocks ultimately comes down to the level of control needed and risk tolerance. In most scenarios, ETFs are the better option for more risk-averse investors who value simplicity.

But thankfully, investors aren’t beholden to just one approach, explaining why many own a mix of stocks and ETFs in their brokerage accounts.

What fund providers offer monthly dividend ETFs?

There’s no shortage of issuers offering monthly dividend ETFs. The five largest fund providers in this space, ranked by assets under management, are as follows: BlackRock, Vanguard, State Street, JPMorgan Chase, and Charles Schwab. Most of the largest monthly income funds invest in fixed-income securities.

What ETF pays the highest monthly dividend?

The YieldMax Short COIN Option Income Strategy ETF (

) currently holds the top podium spot as the highest-yielding monthly dividend ETF. The fund has a dividend yield of 188.95%.

Best Monthly Dividend Stocks for June 2025

Want a shortlist of high-conviction dividend stocks? Secure access to the top 10 dividend stocks watchlist when you 

High-dividend stocks are predictably appealing to income investors due to sky-high yields, which range from the high single digits to the low double digits, making them ideal for retirees and other income-focused investors.

However, high payouts often come with more risk, as the market is full of securities that should come with a warning label rather than a nod of approval. In this guide, we provide a shortlist of the best high-yield dividend stocks, featuring appetizing yields, strong fundamentals, and characteristics of safe dividends.

We built this list of companies with high dividend yields by screening for buy-and-hold stocks with stable payouts and low risk profiles. Several key factors we focus on include yields exceeding 3%, conservative payout ratios, a history of EPS and free cash flow growth, consecutive years of dividend growth, and consensus buy ratings, along with other proprietary factors used to identify the safest high-yield dividend stocks.

These criteria are especially important for stocks with elevated payouts, which have a high risk of dividend cuts and overall volatility compared to the 

) – 11.32% yield | 2.48% 5y dividend CAGR

) – 10.35% yield | 4.38% 5y dividend CAGR

) – 8.22% yield | 24.57% 5y dividend CAGR

) – 7.22% yield | 1.20% 5y dividend CAGR

) – 7.09% yield | 10.15% 5y dividend CAGR

) – 6.80% yield | 3.59% 5y dividend CAGR

) – 5.61% yield | 3.43% 5y dividend CAGR

) – 5.50% yield | 7.55% 5y dividend CAGR

) – 4.88% yield | 6.14% 5y dividend CAGR

) – 4.71% yield | 4.20% 5y dividend CAGR

) – 4.61% yield | 4.87% 5y dividend CAGR

) – 4.54% yield | 10.03% 5y dividend CAGR

) – 4.49% yield | 17.82% 5y dividend CAGR

) – 4.40% yield | 28.58% 5y dividend CAGR

) – 4.09% yield | 5.86% 5y dividend CAGR

) – 3.88% yield | 106.46% 5y dividend CAGR

) – 3.65% yield | 9.64% 5y dividend CAGR

) – 3.28% yield | 5.39% 5y dividend CAGR

) – 3.04% yield | 12.30% 5y dividend CAGR

) – 3.00% yield | 16.50% 5y dividend CAGR

The highest dividend yield stock in our list is Blue Owl Capital Corporation, which has an 11.32% yield. Blue Owl is a business development company in the financial sector that invests in a range of secured and unsecured loans.

While the company boasts a sky-high yield, it may not be a suitable fit for everyone, as it carries more risk compared to companies with decades of consecutive dividend increases, such as dividend aristocrats and dividend kings.

High-dividend stocks are shares of companies that pay above-average yields, most often in slow-growth sectors such as telecommunications, utilities, and energy, as well as REITs and MLPS.

But what’s considered above average? The answer depends on the type of high-yield stock.

Let’s review mid-cap and large-cap stocks, using the S&P 500 as a proxy for size. According to The Wall Street Journal, the S&P 500 yields 1.31%(1). Accordingly, large-cap companies with yields above 2% to 3% could be considered high-yielding by definition. However, the more practical range for mid-cap and larger stocks is 4% to 10%.

Yields are frequently higher when focusing on specialty categories, such as REITs and MLPs, which can offer yields reaching north of 10%.

Beyond yield, high-dividend stocks are attractive to income investors for several more reasons. Firstly, these stocks offer total return benefits in down markets since they pay throughout market cycles. High-yield stocks also act as a hedge against inflation and can be attractive in low-interest-rate environments, albeit with more risk than bonds.

But they aren’t without risks, including plummeting share prices in the event of a dividend cut, high sensitivity to interest rate fluctuations, and concentration in slow-growth sectors that limit price appreciation.

Finding good high-yield dividend stocks is similar to researching any type of dividend stock. Reviewing payout ratio, free cash flow, and debt trends quickly provide critical dividend insights.

Where high-dividend stocks start to diverge is the heightened focus on free cash flow and balance sheet fundamentals to ensure dividend payouts are sustainable. Pay particular attention to cash flow growth, debt-financing trends, interest coverage ratios, debt ratios, and efficiency metrics, such as ROIC.

One trap to avoid is reviewing the wrong fundamentals for certain categories of high-dividend stocks. For example, examining the EPS payout ratio may not be useful for REITs, which almost always have exceedingly high ratios.

REITs are better assessed using funds from operations, as this metric provides better insights into operating performance than earnings, which are heavily influenced by depreciation and amortization charges, as well as gains or losses on property sales.

Banks follow a similar differentiation theme. Net interest income, net interest margin, and ROE combined paint a better picture of bank operating performance than reviewing free cash flow.

REITs are shares of companies that own, manage, or finance income-producing real estate assets. These assets encompass residential, commercial (e.g., retail and office), and healthcare sectors. REITs offer turbo-charged yields upwards of 10% since they are required to distribute 90% of taxable income to shareholders. However, investors should consider dividend taxes, as dividends received from REITs are considered ordinary income, thereby reducing the after-tax yield.

MLPs combine the liquidity benefits of public companies with the tax advantages of private partnerships. Like REITs, MLPs must distribute at least 90% of their earnings to shareholders, resulting in some of the highest stock yields, which can exceed 10%. MLPs primarily invest in energy assets, commonly mid-stream oil and gas pipelines, storage, and processing infrastructure.

The primary downsides of investing in MLPs include tax complications related to K-1 filing requirements, concentrated exposure to the energy sector, and heightened interest rate sensitivity.

Select slow-growth sectors with wide moats possess the ideal characteristics for sustainably high payouts. Utilities often have monopoly and duopoly advantages due to regulation, whereas legacy telecommunications and energy companies have high barriers to entry. Regardless of the source of their moats, these companies tend to have stable cash flows and strong pricing power, resulting in dividend safety and higher-than-average yields.

However, debt levels and free cash flow need to be scrutinized, as companies in high-yielding sectors often rely on debt-financed growth.

Yield traps are stocks that initially appear attractive but may harbor significant risks due to deteriorating fundamentals and unsustainable dividend payouts. Yield traps most often result from a plummeting share price, which inflates the yield, or an unsustainable dividend.

When the yield approaches the mid-to-high single digits, it’s worth looking beneath the surface, or investors may be left licking their wounds when a dividend cut hits. Common signs of a dividend trap include the following.

A high and increasing payout ratio without a commensurate earnings and cash flow increase.

Declining revenue, along with deteriorating earnings and cash flow coverage of dividends.

Over-reliance on debt to finance operations and dividend payouts.

A history of dividend cuts or suspensions, particularly for companies in disruptive or declining industries.

It’s important to consider that just because one of these factors is signaling danger, it doesn’t necessarily mean the stock is a yield trap. More than anything, investors should view poor performance across any single metric as a flag to dig deeper.

Should you reinvest or take dividends as cash?

The decision to reinvest dividends from high-dividend stocks or pocket the cash depends on your investing goals.

For retirees, it’s typically a simple decision: take the income to cover ongoing expenses, especially for investors with a low risk tolerance.

Long-term investors with a greater appetite for risk may take either approach, though reinvesting dividends makes the most sense when investing over decades to take advantage of compounding.

Regardless of the chosen strategy, we include a dividend reinvestment feature within our 

, allowing you to enable reinvestment for each security to see how dividend income and portfolio growth are impacted.

In most scenarios, ETFs are almost always the best low-cost option, especially for beginner investors and those who don’t want to take on another hobby in their already busy schedules. Successfully outperforming the market by picking individual stocks is incredibly difficult and requires years of experience.

ETFs are managed by seasoned professionals and offer instant diversification, which is especially important since high-yield stocks have an elevated risk of dividend cuts. However, 

 aren’t without downsides. The yields are typically lower than those of individual stocks, and share price growth is limited.

Stocks may offer higher payouts, more upside potential, and more control, allowing investors to gain exposure to individual stocks and sectors. But the increased volatility and risk aren’t suitable for those lacking experience. Another ding on investing in individual stocks for targeted sector exposure is that high-quality sector-specific ETFs are available from most major fund companies.

https://www.wsj.com/market-data/stocks/peyields

Best High-Dividend Stocks For June 2025

Best High-Dividend Stocks for June 2025

It’s not surprising that dividend ETFs have consistently grown in popularity. Expense ratios have precipitously fallen for decades, creating a race to the bottom among fund managers competing for assets by lowering costs for investors. That’s market competition at its finest. Combining this trend with the fact that ETFs simplify hands-off investing and offer instant diversification, it’s easy to see why ETFs don't show any signs of slowing in popularity.

While the benefits are significant, there is also a downside to fierce competition. There are thousands of ETFs to choose from, so it’s not always easy to find the best dividend ETFs in a massive universe of options. Our list of the top dividend ETFs helps solve that problem and includes some of the highest dividend funds and other popular options.

Several key factors should be considered when evaluating the best dividend funds. ETFs are designed to provide diversification and less risk than investing in individual stocks. This approach explains why the picks included below are determined based on factors such as assets under management, a low expense ratio, a history of share price growth and dividend growth, consecutive years of dividend increases, and dividend sustainability.

Dimensional International Core Equity Market ETF

SPDR SSgA US Large Cap Low Volatility Index ETF

If looking for more targeted direct stock exposure for your portfolio, check out our guide to the 

It’s a mixed bag of traditional stock investing and derivatives strategies when searching for income-generating ETFs. The current highest dividend ETF is the YieldMax COIN Option Income Strategy ETF (

However, some context is necessary. This ETF utilizes a synthetic covered call strategy to generate monthly income from financial stocks. Such covered call strategies can be risky and are not suitable for risk-averse investors focused on preserving income or achieving share and dividend growth.

The dividend yields come down to earth when narrowing down to dividend ETFs with at least $10 billion in assets under management and quarterly payouts. Here is a list of some of the highest-dividend ETFs that utilize traditional equity investing strategies and are popular with dividend investors.

Vanguard International High Dividend Yield ETF

The universe of dividend ETFs is expansive, with thousands of options, but most funds fall into a handful of core categories.

Dividend growth ETFs invest in companies with established histories of increasing dividends, often including dividend aristocrats and dividend kings, which focus more on dividend sustainability than yield. Dividend appreciation funds are ideal for long-term investors in the accumulation phase, especially when dividend reinvestment is enabled.

High-yield dividend ETFs prioritize yield at the expense of slower growth and increased risk and volatility, compared to dividend growth ETFs. These funds typically yield over 5% and tend to include select categories of securities, such as REITs and MLPs, as well as stocks within the utilities, telecommunications, and energy sectors.

Blended dividend ETFs let you have your cake and eat it too, often built by balancing dividend growth and yield to generate the most amount of income with better quality and lower volatility than a high dividend ETF.

International dividend ETFs are popular with investors seeking high yields. These funds invest in both developed and emerging markets, commonly offering substantial payouts. Many countries have different norms when it comes to capital allocation policies, resulting in attractive yields and diversification from US markets. The downside is that international investing can be riskier and more volatile than investing in US stocks.

Investors primarily covet sector-specific ETFs for their targeted yield and sector exposure. The yields can be substantial, just like the risks. Popular targeted sectors include utilities, real estate (primarily REITs), financials, and energy, all of which are sensitive to economic cycles and interest rates.

In many regards, investors tend to overcomplicate investing decisions, and that’s true when it comes to ETFs as well. However, many complicated investment decisions are simplified by comparing key dividend ETF metrics to determine suitability for your investing goals.

 - Dividends per share divided by share price. The dividend yield helps to compare the income generated by each fund. However, be cautious when analyzing any investment on yield alone to avoid falling into dividend traps that tantalize with sky-high yields.

 - The fee a fund company charges to operate a given ETF is expressed as a percentage of assets under management. There has been a multi-decade-long decline in expense ratios, which has lowered the costs of the most popular ETFs to under 0.10%, or $1 for every $1,000 invested.

 - The total market value of assets in the fund. We generally recommend investing in ETFs with at least $1 billion in assets under management. These funds typically come from well-established companies with a reliable track record.

 - Performance is a key factor that assesses the quality of fund managers, especially when compared to competing ETFs and against benchmarks. Most online resources and brokers provide a detailed review of performance over various periods. However, it’s best to review returns over longer periods to get a reliable read on management quality.

 - Many online resources also provide an overview of ETF portfolio holdings and their corresponding percentage ownership. Reviewing the fund's holdings is especially helpful when investing in individual stocks and ETFs, as it helps avoid overconcentration in stocks you may already own directly.

 - Quarterly dividend payouts are common with traditional equity-based ETFs, though monthly dividend ETFs are increasingly more common and popular with investors craving yield. Several fund managers also specialize in weekly dividend ETFs, including Yieldmax, Roundhill, and Defiance.

Living off of dividends provided by an ETF portfolio is possible. However, the portfolio size required to achieve that goal is sizable.

Let’s run through the numbers using a sample scenario of $80,000 in annual expenses. You’d need investments totaling $2,000,0000 at retirement with a 4% yield to cover expenses (80,000 / 0.04 = 2,000,000). Here’s how the total portfolio value required changes based on yield.

 to work backward and determine the initial investment needed to grow a portfolio to approximately $2,000,000. You’d have $1,964,530 starting with a $100,000 initial investment and contributing $175 per month over 30 years, with dividend reinvestment enabled, a 3% dividend growth rate, and an 8% annual share growth rate.

But hypothetical scenarios don’t always represent reality, especially when considering the average retirement savings of retirees. According to Edward Jones research, the average retirement savings for retirees aged 65 to 74 is significantly lower, at $609,230(1).

These talking points demonstrate that living off dividends is possible. But the majority of investors aren’t investing enough to build the nest egg required to fully cover retirement expenses with dividend income.

The top dividend ETFs all share select common attributes that make them stand out from the rest, including low expense ratios, sustainable yields, and a history of dividend growth, among other key details. Here are the top five that fit our criteria for pack-leading options.

1. Average retirement savings. Edward Jones, 

https://www.edwardjones.com/us-en/market-news-insights/investor-education/investment-age/average-retirement-savings-age