Key Points
Realty Income offers a rock-solid customer base and generous monthly dividends.
A downbeat stock and a relatively high-yield dividend point to an opportunity in Clorox.
Amid the fighting in the Middle East, stock investing may seem increasingly perilous. Since uncertainty often leads to stock selling, many investors are understandably reluctant to buy more growth-oriented stocks.
Fortunately, income-oriented stocks tend to deliver steady returns regardless of the economy. In such an environment, these stocks could not only protect one's wealth and deliver income, but they also hold the possibility of increasing one's wealth, particularly if some of the gloomier forecasts do not come to pass. Here are two to consider this month.
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1. Realty Income
Realty Income (NYSE: O) may be better known for the customers it serves rather than as a company itself. The company leases single-tenant properties to customers ranging from Home Depot to FedEx, and its approximately 15,500 properties are almost 99% leased.
These and its other customers are well-established corporate entities that have weathered numerous economic downturns. Thus, they will likely continue paying rent, even if a downturn occurs.
The real estate investment trust (REIT) is also known as the "monthly dividend company" for delivering a payout every month. That dividend, which has risen every year since 1994, is almost $3.25 per share annually and yields 5%, well above the S&P 500's 1.2% average.
Also, the stock is cheap if you look closely. Though its price-to-earnings (P/E) ratio of 55 appears elevated, investors should remember that with REITs, it is funds from operations (FFO) income that is the more critical metric.
The $4.25 per share in FFO income in 2025 means that it sells at around 15 times that price, a factor that should limit the downside as investors collect their monthly dividend payments from this elite high-yielding monthly dividend stock.
2. Clorox
The Clorox Company (NYSE: CLX) may be better known than Realty Income, and may also seem just as lackluster. Investors know its flagship bleach products well, but may not realize it owns brands like Glad, Brita, and Purell.
Nonetheless, being boring is often what protects wealth, and the stock may offer some opportunities for growth. Earlier in the decade, the stock sold off as the pandemic-era obsession with cleanliness subsided. Also, a cyberattack and a relatively rough transition to a new enterprise resource planning (ERP) system weighed on the stock.
Still, Clorox's recession-resistant product lines should keep selling regardless of the overall economy, making another stock sell-off less likely. Moreover, the new ERP system has the potential to boost efficiency and, by extension, increase profits.
That factor should help the continued growth of its dividend, which has increased every year for decades. At $4.96 per share yearly, it yields 4.5%.
Additionally, at an 18 P/E ratio, investors can buy at a significantly discounted valuation while they collect dividend income. Hopefully, that situation will turn what looks like a lackluster holding into a more dynamic income and growth stock.
Will Healy has positions in Clorox and Realty Income. The Motley Fool has positions in and recommends Home Depot and Realty Income. The Motley Fool recommends FedEx. The Motley Fool has a disclosure policy.