With a tough year behind us but a potentially eventful one in front of us, investors may want to target the best monthly dividend stocks to buy to get 2023 off on the right foot. Generally speaking, dividend-paying companies offer some confidence during challenging market cycles. Primarily, this is because the underlying enterprises focus on rewarding shareholders through passive income rather than outright growth.

Regarding the best monthly dividend stocks specifically, this subsegment of passive income providers align with scheduling conveniences. By that, I’m referring to the basic schedule of life. Whether it’s your rent, utilities, internet services or what have you, typical obligations occur monthly, not quarterly.

Therefore, if you rely on passive income to take care of everyday needs, enterprises that provide payment every 30 days present greater practical utility. With that in mind, below are the best monthly dividend stocks to consider for the new year.

LTC Properties (LTC)

On the surface, LTC Properties (NYSE:LTC) doesn’t particularly wow market participants. For 2022, LTC gained 1.4%. To be fair, it’s far better than the benchmark S&P 500 index, which ended up shedding a hair under 20% during the same period. Nevertheless, LTC isn’t exactly an outperformer.

As well, analysts rate LTC as a consensus hold. Interestingly, no Wall Street expert assigned a buy rating on LTC. However, its current average price target implies a near-10% lift from the current price. Still, these aren’t exactly jump-out-of-the-screen statistics. So, why bother mentioning the company among the best monthly dividend stocks to buy?

Fundamentally, it comes down to its core business of investing in seniors housing and health care primarily through sale-leasebacks, mortgage financing, joint-ventures, construction financing and structured finance solutions. As the record-busting demographic group known as the baby boomers retire, demand for senior care facilities will logically skyrocket. Further, according to a Nov. 2020 report by the Pew Research Center, the pace of boomer retirements accelerated. Thus, LTC deserves a look based on forward-looking relevance.

EPR Properties (EPR)

If you thought LTC Properties above featured a confidence problem based on initial perceptions, EPR Properties (NYSE:EPR) admittedly presents challenges. For 2022, EPR lost 22% of equity value. Just to be completely transparent, that’s a bit worse than the benchmark S&P 500. As well, it features a lackluster consensus rating among covering analysts – a hold. However, it does have one buy rating.

Still, one factor that stands out centers on demand from the smart money. According to TipRanks, EPR carries a confidence signal of “very positive” among hedge funds. For some investors, this indicator may carry more weight than analyst ratings because of hedge funds’ skin in the game.

Fundamentally, though, EPR presents an intriguing case because it focuses on experiential entertainment. Specifically, the real estate firm targets establishments tied to amusement parks, movie theaters, ski resorts, and other entertainment properties. Per its public profile, the enterprise owns 353 properties. Moving forward, cheap entertainment venues such as movie theaters may provide escapism for struggling households. Therefore, EPR ranks among the best monthly dividend stocks to buy.

Realty Income (O)

Realty Income (NYSE:O) routinely makes up the ranks for best monthly dividend stocks to buy. However, this longstanding honor didn’t spare O stock from volatility in 2022. For last year, the company nearly 11% of equity value. Still, I guess you can say it’s very roughly half the loss of the benchmark equities index.

However, a more powerful upside catalyst centers on Realty Income enjoying an e-commerce-resistant business. And by that, I mean that Amazon (NASDAQ:AMZN) is less likely to beat up Realty Income for its lunch money. Its portfolio tends to focus on critical needs, such as groceries, hardware stores and pharmacies. To be sure, Amazon has attempted to compete in these segments. But when you have immediate needs, it’s just better to have a physical store nearby. Therefore, O brings much relevance to the table as one of the best monthly dividend stocks to buy.

STAG Industrial (STAG)

With Stag Industrial (NYSE:STAG), we must get the bad news out of the way first. While it’s listed here among the best monthly dividend stocks, STAG dropped more than 31% of equity value in 2022. Understandably, such a performance will not inspire much confidence among prospective investors. However, it’s worth providing some patience with this enterprise.

Fundamentally, Stag benefits from the always-relevant e-commerce arena. Stag focuses on industrial properties, such as the massive facilities you see near major airports. Through its properties, Stag is exposed to the warehousing, distributing and light manufacturing industries. As of 2021, the company featured 95 leases covering 13.7 million square feet.

As for STAG’s underperformance, much of it has to do with shifts in consumer behavior. While the years 2020 and 2021 saw a dramatic lift in e-commerce sales, 2022 became the year of revenge travel. However, e-commerce appears to be making a comeback recently, which could bode well for STAG.

AGNC Investment (AGNC)

As with Stag Industrial above, AGNC Investment (NASDAQ:AGNC) presents a compelling case for best monthly dividend stocks to buy. However, it too suffers from an initial crisis of credibility. From January through December last year, AGNC dropped 33% of equity value. Given that this performance slips well below the benchmark equities index, it’s understandable why some folks are put off.

At the same time, shares have performed well in recent sessions. Since Oct. 10, 2022 when AGNC closed down at $7.37, shares popped higher to the tune of 40% plus. Structured as a real-estate investment trust (as are the companies above), AGNC focuses on agency residential mortgage-backed securities on a leveraged basis.

To be fair, residential real state presents significant risks due to the Federal Reserve’s monetary tightening policy. So AGNC won’t be for some folks. However, for optimists, the company only focuses on mortgages backed by federal institutions; namely, these are Fannie Mae, Freddie Mac, Ginnie Mae or the Federal Home Loan Banks.

Prospect Capital (PSEC)

Moving onto the higher-risk, higher-reward portion of the best monthly dividend stocks to buy, we start with Prospect Capital (NASDAQ:PSEC). Prospect represents a business development company (or BDC), “an organization that invests in small- and medium-sized companies as well as distressed companies,” per Investopedia. For 2022, PSEC dropped 18% of equity value, which understandably raises concerns.

However, this volatility died substantially in the back half of the year, with PSEC declining by only 2.5%. Part of this mitigation of pain could be because contrarian investors see value in the underlying enterprise. Yes, Gurufocus.com’s proprietary calculations for fair market value rates shares as significantly overvalued. However, objectively speaking, the market prices PSEC at 0.7 times book value. That’s below the industry median of 0.89-times book.

As well, Prospect features a return on equity of 6.8%, beating out 70% of its competition. Fundamentally, a higher-than-industry-average ROE indicates superior capacity to convert equity financing into profits. Thus, PSEC is worth a look for those wishing to gamble on the best monthly dividend stocks.

Oxford Square Capital (OXSQ)

For those that really want to swing for the fences regarding the best monthly dividend stocks to buy, give Oxford Square Capital (NASDAQ:OSXQ). Interestingly, Oxford Square doesn’t initially appear riskier than other speculative plays in this subsegment. For instance, it lost 26% of equity value in 2022, which isn’t the worst performance on this list. And in the week before New Year’s Eve, OXSQ gained over 4%.

However, the business development company doesn’t have exactly have a strong history of outstanding performance. For instance, in the trailing five years, shares fell over 46%. And financially, Oxford’s profile could be diplomatically described as middling. While it’s not abjectly terrible, the company doesn’t offer a great look either.

Nevertheless, if you’re seeking strong passive income on a monthly basis, it’s difficult to ignore Oxford Square. At time of writing, Dividend.com notes that the company offers a forward yield of 13.46%. That’s well above its sector average of 3.18%. Still, it’s currently not on a run of consecutive dividend increases. As well, its payout ratio stands at 87.5%, which is rather high.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.