The Unstoppable Monthly Dividend Stock to Buy and Hold Forever

Dividend stocks that pay on a monthly basis are a bit of a rarity. That's because many often just pay every quarter. While they may offer high yields, they still may not be ideal options for income investors who want cash flow coming in every month of the year. There are exchange-traded funds and the possibility of holding multiple stocks, but those options can come with added costs, greater complexity, and lower overall yields.

This is where Realty Income (NYSE:O) shines. In addition to being a high-yielding stock (it’s yielding around 5.9% right now), it also pays its investors every month. On top of it all, its business is diverse, and it has continuously grown its dividend for decades. It's an unstoppable income stock that investors should consider loading up on. Here's a closer look at it.

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Realty Income has a diversified business with an impressive track record

In order to be able to offer high dividend income and also grow its payout, a company needs to have a robust business, one that's capable of adapting to changing market conditions. Realty Income fits the bill, as it is a real estate investment trust (REIT), arguably one of the best ones out there due to its diversification. Spanning 92 industries and over 1,700 clients, it isn't heavily reliant on a few big names or companies.

The company routinely announces increases to its payout, with the latest one coming earlier this month. On Sept. 8, Realty Income announced its 136th dividend increase since 1994, when its shares listed on the NYSE. Although its increases are typically mild, they add up significantly over time.

The REIT's current monthly dividend of $0.2715 has risen by 34% over the past decade, averaging out to a compounded annual growth rate of 3% during that time frame. That's a solid, sustainable rate that in many years would have been higher than the rate of inflation.

The stock can be a terrific pillar for any portfolio

Realty Income's business has been resilient over not just years but decades. It's been able to withstand economic uncertainty and recessions, and still deliver rising dividend income to its investors. It's a battle-tested dividend stock that's proven its worth.

Although its returns in the past five years may be underwhelming -- the stock has fallen by 14% over that stretch -- I believe that's more to do with its high valuation than anything else. While it still isn't a terribly cheap stock to own as its price-to-earnings multiple is above 40, it can still make for an unstoppable dividend stock to rely on for recurring dividend income.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.