You can take several possible approaches to stock market investing to grow your wealth. A growth- and income-focused, well-balanced portfolio is essential to achieving long-term success as a stock market investor.
When the market is bullish, growth stocks offer outsized wealth growth through capital gains. When the market is bearish, high-quality, income-focused stocks offer regular returns, regardless of declining share prices.
Since the market is volatile right now, it might be apt to focus on income-generating assets for your self-directed portfolio. Specifically, we will discuss monthly dividend-paying stocks that you can consider for your portfolio.
When it comes to dividend stocks, high yields are not everything. Stock market investing is risky, and you must do your due diligence to invest in stocks likelier to deliver consistent returns. A stock with a financially strong underlying business is better equipped to continue distributing shareholder dividends in bear markets.
High-yielding dividends might usually be considered worrisome. However, these two real estate investment trusts (REITs) operate in more defensive market sectors, reducing the capital risk involved with investing.
NorthWest Healthcare Properties REIT
NorthWest Healthcare Properties REIT (TSX:NWH.UN) is a $1.98 billion market capitalization REIT that owns, develops, and manages a globally diversified portfolio of real estate properties.
It operates in a niche sector, boasting a portfolio dedicated to tenants in healthcare, research, education, and life sciences. With a focused approach on healthcare-focused assets, it can generate stable, strong, and steady cash flows, regardless of macroeconomic factors.
The average lease agreement in NWH REIT’s portfolio is 14 years. Combined with an impressive 97% occupancy rate, NorthWest Healthcare Properties REIT is in an excellent position to generate substantial cash flows. As of this writing, NorthWest Healthcare Properties REIT trades for $8.22 per share and boasts a 9.79% forward annualized dividend yield, which it pays on a monthly schedule.
Slate Grocery REIT
Slate Grocery REIT (TSX:SGR.UN) is another high-yielding dividend stock you can own for monthly dividend income. The $638.30 million market capitalization trust focuses on acquiring, owning, and leasing a portfolio of diversified commercial real estate properties in the U.S.
As its name suggests, its primary focus is on grocery-anchored retail properties. It has several major retailers under its belt, including Westin Centre, Glenlake Plaza, Bloomingdale Plaza, and many others.
Slate Grocery REIT has been expanding its portfolio for years and has managed to continue doing so amid the pandemic due to the essential nature of its business.
As of March 2023, it has a 93.2% occupancy rate, but it expects the figure to improve, as the trust spends capital to improve its properties. The average lease term for its portfolio is five years, but the weighted average lease term of its portfolio goes up to 30 years if you include all grocer renewal options.
As of this writing, Slate Grocery REIT trades for $13.62 per share and boasts an 8.69% forward annualized dividend yield that it pays at a monthly schedule.
Foolish takeaway
Investing in monthly dividend stocks gives you the opportunity to get returns on a monthly schedule besides wealth growth through any capital gains. You can reinvest what you earn to purchase more shares and accelerate your wealth growth through the power of compounding.
If you want to own shares of high-quality, monthly-income-generating assets, NorthWest Healthcare Properties REIT, and Slate Grocery REIT can be excellent foundations for such a portfolio.
