You Won't Regret Buying These 3 Dividend Stocks in July

Written by Micah Zimmerman for The Motley Fool->

Watsco is a 52-year dividend payer that continues growing its payout through steady cash flow and a recession-resistant HVAC business.

EPR Properties is a REIT offering a monthly yield of 6%+ backed by improving operations and growing cash flow.

Palmer Square Capital BDC is a high-income BDC that's rewarding investors with supplemental dividends as portfolio performance strengthens.

There's a version of dividend investing that works and a version that doesn't. The version that doesn't: Chasing the highest yield you can find, loading up on it, and hoping it holds. The version that does: Finding companies that have built the kind of cash flow that lets them pay and grow dividends through just about anything.

The three stocks below fall into that second category, and none of them are names you'll see on every "best dividend stocks" list.

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Watsco (NYSE: WSO) distributes heating, ventilation, air conditioning, and refrigeration equipment across North America. That's it. There's no flashy pivot to artificial intelligence, no moonshot, no hype. Just a decades-long monopoly on the distribution layer of an industry where demand never really goes away. People need HVAC equipment, whether the economy is good or bad.

In February 2026, Watsco's board raised its annual dividend 10% to $13.20 per share, or $3.30 per quarter. It has now had 52 consecutive years of paying dividends. Most companies can't sustain that through one recession, let alone a half-century of them. Chairman and CEO Albert Nahmad credited the increase to the company's strong cash flow and "confidence in the prospects of our business." At a forward yield of around 3.3%, this isn't a yield that turns heads, but the consistency of the growth behind it is the actual story. A 10% raise every few years compounds into something real over time.

EPR Properties (NYSE: EPR) is the kind of real estate investment trust (REIT) that sounds risky until you look closer. The company owns experiential real estate -- movie theaters, ski resorts, eat-and-play venues, fitness centers, and attractions. After COVID-19 nearly broke the experiential real estate category, EPR spent the past few years proving its portfolio wasn't just surviving, it was improving.

EPR pays monthly, which some investors prefer for cash flow planning. The company raised its monthly common dividend 5.1% to $0.31 per share, effective April 2026, putting the annualized rate at $3.72 per share -- a yield north of 6% at recent prices. The raise came off the back of FFOAA (funds from operations as adjusted) and AFFO (adjusted funds from operations) per diluted share growth of roughly 6% year over year. That kind of underlying growth supporting a dividend hike tells you more about a company's health than the yield number alone.

Palmer Square Capital BDC (NYSE: PSBD) doesn't have the name recognition of the larger business development companies, but it has a habit that income investors should pay attention to: It keeps paying supplemental dividends on top of its base.

The company declared a base dividend of $0.36 per share for Q2 2026, then tacked on a $0.03 supplemental dividend payable July 13, 2026 -- the second straight quarter it paid above its base rate. Palmer Square focuses on senior secured loans to U.S. middle-market companies, the segment of the economy that tends to get less press than large-cap borrowers but where deal flow and spreads can be more favorable for lenders.

Supplemental dividends aren't guaranteed. They depend on whether net investment income exceeds the base. But two in a row, with the Q2 supplemental tripling the Q1 amount, suggests the underlying portfolio is performing. For investors seeking income with upside optionality built into the dividend structure itself, PSBD is worth a closer look.

These three businesses are very different: an industrial distributor, an experiential REIT, and a middle-market lender. But they are connected by one factor: They've each found a way to grow what they pay shareholders, not just sustain it. All tickers are looking juicy this July for a solid dollar-cost average investment.

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Micah Zimmerman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends EPR Properties and Watsco. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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