Income investors love their dividends, but one problem with most dividend-paying stocks is that dividends are only paid quarterly, making it difficult for some investors to budget for regular bills like rent and utilities. However, some real estate investment trusts (REITs) solve this problem by sending out 12 monthly dividend payments per year.
As with all dividend stocks, investors should not just chase high returns, but look for solid companies with good long-term track records. These three REIT stocks are well-known, solid companies with reliable dividend-paying histories.
About: This little-known REIT has produced double-digit annual returns over the past five years
Realty Income Corp. (NYSE: O) is a monthly dividend REIT that owns and has long-term triple net lease agreements with more than 11,400 properties worldwide. Its U.S. tenant list includes major, well-known retailers such as Walgreen Boots Alliance Inc, Dollar General Corp, FedEx Corp and Dollar Tree Inc.
Among income investors, Realty Income is one of the most popular and popular REIT stocks. Realty Income is one of 65 S&P 500 Dividend Aristocrats, meaning it has raised its dividends for at least 25 consecutive years. O has increased its dividend 116 times since its initial public offering in 1994.
Unlike many other REITs that have underperformed over the past 52 weeks, O is up 7.5% with a dividend yield of 4.2%.
LTC Properties Inc. (NYSE: LTC) is a California-based REIT that owns and leases both senior housing and skilled nursing facilities. It has over 200 investment properties, covering 29 states across the US. LTC’s revenue comes from triple net leases, mortgages and mezzanine loans.
Like others in the senior housing sector, LTC’s inventory was decimated in February 2020. For the next two years, LTC struggled with increased costs and vacancies related to the COVID-19 pandemic. However, after missing analysts’ estimates for three straight quarters, LTC finally led the way with higher revenue and earnings per share (EPS) in the second quarter of 2022. As a result, the stock has been in a decline since May and has risen approx. 35% during that period.
LTC pays a monthly dividend of 0.19 or $2.28 annually. At the current price of $44.41, that’s a dividend yield of 5.13%. LTC seems to have overcome the pandemic related difficulties and could be a lucrative monthly income stock going forward.
STAG Industrial Inc. (NYSE: STAG) is a Boston-based REIT that buys and operates single-tenant industrial properties in 40 states. It currently has 569 properties in its portfolio, with 111.5 million square feet of space valued at approximately $8.1 billion.
Despite its revenue and earnings growth over the past few years, as well as analyst estimates over the past four quarters, STAG stock has been on a strange rise. A $42 share in April 2022, STAG fell to $29 in July before recovering to $32.49 as of Wednesday’s close. Overall, STAG is down about 20% over the past 52 weeks.
One negative with STAG is that the dividend has only grown 3% over the past five years. On the other hand, the dividend is paid monthly without a cut, and the latest quarterly funds from operations (FFO) of 0.56 is more than enough to cover three months of dividend payments totaling 0.365. The current dividend yield of 4.5% is well above last spring’s yields, making STAG a potential bargain for income investors right now.
Highlights of today’s real estate investment news
Flagship Real Estate Fund by Fundrise acquired a townhouse rental community in Charlotte, NC, for approximately $6.3 million. The Flagship Real Estate Fund has returned YTD 6.9% so far in 2022.
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