3 Monthly Dividend Stocks Yielding Over 7% for Retirement

Traditional dividend investing often leaves investors waiting four long quarters for payment checks while struggling with monthly budget coordination. The typical 1-3% dividend yields common among blue-chip stocks compound slowly when reinvested and frequently prove insufficient for covering retirement expenses. The solution lies in implementing a barbell strategy that balances high-yield dividend payers with solid blue-chip stocks, creating a portfolio that generates meaningful income without taking on unsustainable risk.

This approach allows investors to capture the benefits of monthly compounding while maintaining exposure to stable, established companies. The three highlighted stocks—Modiv Industrial (MDV), Freehold Royalties (FRHLF), and Ellington Financial (EFC)—each offer yields above 7% with monthly distributions, a rare characteristic in today’s market that addresses the cash flow timing mismatch many retirees face between quarterly dividend payments and monthly living expenses.

Modiv Industrial (NYSE:MDV) represents a compelling opportunity in the industrial real estate investment trust (REIT) space, focusing exclusively on manufacturing facilities leased to tenants aligned with the U.S. economy and its supply chain. The company’s client base spans aerospace/defense, infrastructure, and automotive industries, positioning it to benefit from long-term nearshoring and onshoring trends, plus ongoing tariff policies that support domestic manufacturing.

The REIT’s business model provides exceptional stability, with tenants handling most operating expenses and long-term leases generating predictable income. This stability translates directly to dividend sustainability, as demonstrated by Q2 free cash flow of $18 million comfortably exceeding the $15 million spent on dividends. While the gap between available cash and dividend payouts has narrowed over time, the dividends remain well-protected.

Funds from operations (FFO), a key metric for REIT valuation, further confirms the dividend’s security. With forward FFO at $1.42 compared to the $1.17 dividend rate, MDV stock’s 8.11% yield appears not only attractive but sustainable for long-term income investors seeking monthly distributions from industrial real estate exposure.

Freehold Royalties (OTCMKTS:FRHLF) offers investors exposure to the energy sector through a unique royalty model that eliminates operational risk while providing substantial income. Rather than drilling wells itself, the company purchases royalty interests in existing or future crude oil and natural gas production, paying operators upfront in exchange for a percentage of every barrel or cubic foot produced.

This approach results in significantly lower breakeven prices compared to traditional producers and has historically allowed Freehold Royalties to maintain dividends during periods when other oil companies were forced to slash or eliminate payouts. The company’s growth trajectory has been impressive, with revenue growing 10% annually over the past three years and analysts projecting 12% growth this year.

The dividend coverage remains robust, with funds from operations reaching $57 million ($0.35 per share) compared to $44 million in dividends paid ($0.27 per share). With a forward dividend yield of 7.91% and a remarkable five-year dividend growth rate (CAGR) of 20.57%, Freehold Royalties represents a compelling combination of high current income and substantial dividend growth potential in the energy sector.

Ellington Financial (NYSE:EFC) operates in the financial assets space, purchasing and managing various loan pools in the U.S. market. The company’s business model involves capturing the spread between the interest collected on these loans and the lower interest paid on short-term borrowing used to fund them. By constantly refinancing short-term debt, EFC maintains this interest rate spread, generating consistent monthly income.

The company offers a forward dividend yield in the double digits at 11.5%, with a payout ratio of 91.23%. While this coverage appears tight, the company maintains solid financial footing and benefits from its REIT status, which requires distributing at least 90% of taxable income to shareholders annually. This structural requirement ensures ongoing high distributions to investors.

Analysts expect the company to continue posting modest revenue and earnings growth, and while near-term upside potential may be limited, potential interest rate cuts could make the substantial yield increasingly attractive as Treasury investments lose their appeal. For income-focused investors, Ellington Financial provides access to double-digit monthly yields from professionally managed financial assets.

All three companies demonstrate the critical characteristics of sustainable high-yield investments: strong coverage ratios, stable underlying business models, and monthly distribution schedules that align with retiree cash flow needs. Modiv Industrial benefits from industrial real estate trends and tenant stability, Freehold Royalties leverages its unique royalty model to generate energy exposure without operational costs, and Ellington Financial utilizes interest rate spreads within its REIT structure to maintain high distributions.

The combination of these three monthly dividend payers allows investors to implement the barbell strategy effectively, balancing higher-yielding opportunities with fundamental stability across different sectors. For retirees seeking to generate consistent monthly income without sacrificing yield or taking excessive risk, this trio represents a rare opportunity to access sustainable high yields with the compounding benefits of monthly distributions.