The quarterly ritual of dividend distribution – a polite fiction, really – has a certain predictability. But now, some enterprises, driven by a desperate need to appear generous (or perhaps distract from more pressing concerns), offer monthly checks. Eighty such entities, they claim. One imagines the accounting departments weeping softly into their spreadsheets. It is a performance, of course. A monthly affirmation of solvency, offered to the masses as a palliative against the encroaching anxieties of modern capital.
These monthly benefactors are largely drawn from the ranks of Real Estate Investment Trusts (REITs) and Business Development Companies (BDCs) – structures designed, with admirable ingenuity, to avoid certain unpleasantries with the tax authorities. They relinquish a substantial portion of their earnings, and in return, receive a benevolent nod from the state. A Faustian bargain, if ever there was one. They pay out at least ninety percent of taxable income. Ninety percent. The remaining ten percent, one suspects, is used to fund increasingly elaborate shareholder lunches.
1. Realty Income
Realty Income, they proclaim, is the “monthly dividend company.” A self-designation, redolent of desperation. They have been at it for six hundred and sixty-seven consecutive months, a feat of bureaucratic endurance that would impress even the most hardened apparatchik. Thirty-two years of steadily increasing payouts. A monument to incrementalism, built on the shifting sands of commercial real estate. Currently, a paltry $0.27 per share monthly. An amount barely sufficient to purchase a decent cup of coffee, yet enough to lull investors into a false sense of security.
They own a vast portfolio of commercial properties – retail, mostly, with a smattering of industrial buildings. Fifteen thousand, five hundred properties, leased to sixteen thousand tenants across ninety-two industries. A dizzying network of obligations, held together by lease agreements and the fragile hope that no one defaults. Occupancy rate: 98.7%. A number that sounds impressive until one considers the sheer scale of the operation. The stock itself has enjoyed a modest uptick – 13% year to date, 17% over the past year. A fleeting moment of prosperity in a world teetering on the brink. Over a decade, with dividends reinvested, a return of 6.4%. Without? A mere 1.5%. A testament to the power of compounding, or perhaps, the illusion thereof.
2. Main Street Capital
Main Street Capital, a Business Development Company, invests in lower middle market companies. A curious occupation, akin to a physician tending to a particularly sickly patient. They provide debt and equity solutions to companies with revenues between ten and one hundred and fifty million dollars. Two hundred companies, all vying for a piece of the pie. They offer both debt and private equity – a “one-stop shop,” as they call it. A rather ominous phrase, suggesting a lack of scruples. They’ve been increasing their annual payout for eighteen years, dating back to 2007. A remarkable run, fueled by… what, exactly? Hope? Naiveté? The sheer inertia of the market? Currently, $0.26 per share monthly, yielding 6.96%. A respectable sum, but hardly enough to retire on.
The stock has averaged an 8.3% annualized return over the past decade, 16.3% with dividends reinvested. A figure that surpasses the S&P 500. A fleeting victory, perhaps, but one they will undoubtedly trumpet from the rooftops. One suspects, however, that the true beneficiaries of this arrangement are not the shareholders, but the managers, who collect their fees regardless of the outcome.
3. Phillips Edison & Company
Phillips Edison & Company, a retail REIT, invests in grocery-anchored shopping centers. A rather prosaic pursuit, one might think. But in a world obsessed with innovation, there is a certain comfort in the mundane. They own three hundred and twenty-four shopping centers across thirty-one states, housing five thousand, five hundred tenants. A vast network of commerce, built on the foundations of milk, bread, and toilet paper. Occupancy rate: 97.3%. A number that masks a multitude of sins. They favor neighborhood shopping centers over regional malls – a shrewd move, perhaps, recognizing that people are more likely to buy groceries closer to home. Grocery stores, they claim, are a “sturdy tenant.” A comforting thought, until one considers the rise of online delivery services.
The company has been around since 1991, but only went public four years ago. And in each of those four years, it has raised its dividend. A predictable pattern, driven by the relentless demands of the market. Currently, $0.11 per month, yielding 3.42%. A pittance, really, but enough to keep the shareholders placated. The stock has averaged a 7% annual return, 11% with dividends reinvested. A modest success, built on the unwavering demand for… well, groceries. One can only hope that the apocalypse does not involve a shortage of bread.
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2026-02-14 17:32