Best REITS For Reliable Income: December 2023


August 2023

In that case, these downtrodden REITs may have lots of long-term upside. Still, the practical difference between REITs and dividend stock yields will be less than you’d think. Investors received a dividend of $.26 per share per month as of August 2023. Omega has the majority of its properties in the United States but has a small presence in the United Kingdom as well. Omega was founded in 1992, produces about $945 million in annual revenue, and trades with a market capitalization of $7.7 billion.

  1. AGNC is a mortgage REIT primarily investing in agency mortgage-backed securities (MBS).
  2. Insiders have made numerous open-market purchases of MDV stock since its IPO.
  3. That’s because dividends are taxable unless you hold them in a tax-advantaged account such as an IRA.
  4. For many investors that trade-off isn’t worth it, particularly when the economic outlook remains uncertain.
  5. Finally, the pandemic proved to the market that movie theaters remain needed to monetize new blockbusters.

Chatham looks to take advantage of properties where demand currently outpaces supply, paying particularly close attention to those that might be undercapitalized. It also takes an active management approach by rebranding, revitalizing or redeveloping properties that add value for both the hotel and shareholders. Mortgage REIT Invesco Mortgage Capital (IVR) is an interesting case study on the yield-reliability trade-off.

REIT Stocks That Pay Monthly Dividends

It also invests in some residential and commercial mortgage-backed securities that are not government-guaranteed. If you decide to open a brokerage account (and don’t already have one), the process is straightforward. You’ll provide basic contact details and certain personal details (e.g., Social Security number and a valid ID). You’ll be asked for some additional information about your income, occupation, and investing experience.

A real estate investment trust is a company that owns real estate investments. The real estate might vary from commercial use for shopping malls to residential in the case of new home builders or apartment managers. With 40 premium hotel brands and locations across 15 states, Chatham Lodging Trust offers access to the hospitality industry.

Credit Suisse named NexPoint one of its top five REIT picks in June. NXRT shares enjoy Buy or Strong Buy ratings from five of the company’s eight Wall Street analysts. Investors should be sure to understand their costs and how they operate before buying shares. Here are a half-dozen REIT prospects, each specializing in a different niche of the real estate sector. Amanda Bellucco-Chatham is an editor, writer, and fact-checker with years of experience researching personal finance topics.

This area is characterized by limited new supply, rising demand and rent growth that has consistently exceeded national averages. This REIT’s ability to thrive across all parts of a real estate cycle is evidenced by its 15-year track record that shows 9% annual FFO per share gains and 22% yearly dividend growth through 2021. Logistics REIT Prologis (PLD, $126.63) is merging with rival reits that pay monthly Duke Realty (DRE) in a $26-billion all-stock transaction. Other benefits of the merger include anticipated annual synergies of $375 million to $400 million and an anticipated boost to annual FFO per share of 20 cents to 25 cents. CUBE put in a strong showing in the June quarter, boasting a same-store occupancy rate of 95% and generating 19% same-store net operating income gains.

The numerous types of investments Apollo provide make it easy to get started. Jussi Askola is the President of Leonberg Capital, a value-oriented investment boutique that consults hedge funds, family offices, and private equity firms on REIT investing. He has authored award-winning academic papers on REIT investing, has passed all three CFA exams, and has built relationships with many top REIT executives. Again, that’s very compelling coming from a REIT that owns such desirable growth assets and retains so much cash flow for buybacks. Data centers—where cloud providers turn to meet their massive storage needs—are one such sector. Buller says that the rise of artificial intelligence is accelerating the demand for these interconnection sites, which benefit from restricted supply and strong pricing power.

In addition, when combined with the 5.5% expected growth rate and 4.9% starting dividend yield, we expect average total annual returns of 9.9% over the next five years. The company maintains a strong investment-grade balance sheet, boasts plenty of liquidity and recently reiterated its commitment to at least 12.5% annual dividend growth. What’s more, shareholders were rewarded with the company’s ninth consecutive quarterly dividend hike. This is just more of the same for one of the best names for REIT dividends, with payouts growing 30% over nine quarters and 17%, on average, annually over five years. Plus, the dividend appears safe with payout at just 75% of distributable earnings, and its rich dividend yield is three times the average peer levels.

How To Pick The Best REIT Stocks

The longer you hold your shares, the higher the yield you will receive on your original investment and the greater the impact of the “cumulative dividend effect.” I’m not retired and accordingly, most all of my dividend income is reinvested; however, many income investors are looking for monthly dividend payments to support their income during retirement. By investing in REITs that pay monthly, you’re able to better match fund your living expenses and create a more disciplined approach to saving and investing. Eight of my investments pay monthly dividends/distributions, although not all of them are common stocks. Since there’s so many of them, I only have the space to give the briefest of pitches. As always, this should be the beginning of your research, not the fullness of it.

Are REITs Good Investments?

Realty Income is heavily traded with an average daily volume of 3.89 million shares, an amount indicating the presence of large institutional investors and traders. But in my estimation, there is an even bigger disadvantage to this size and scale. The net lease structure, which includes minimal organic rent growth, requires exponential growth in assets just to generate linear growth in AFFO per share. That’s why I’ve looked closely at every stock that pays a monthly dividend. I like monthly dividend payers, but I only want to own the very best of them. That said, there are some conspicuous benefits of monthly dividends as well.

This can include real estate preferred stocks, corporate bonds, and commercial mortgage-backed securities (CMBS), along with equity REITs. This flexibility has been particularly valuable in the current market, since high interest rates translate into high income and yields for fixed income assets. REITs (real estate investment trusts) are stocks that dish 90% of their profits as payouts. Rather than buying shares and “hoping” they’ll go up, we can lock in quarterly (or even monthly!) dividends—real cold cash!

However, more than 500 of the properties are leased to tenant Loblaw, which is a large Canadian retailer. Its funds from operations (FFO) per share dipped 6% but only due to higher lease termination income in last year’s quarter. It is Manhattan’s largest office landlord, with 77 buildings totaling 35 million square feet.

A falling vacancy rate coupled with rising rents is a sign that demand is improving. The high-yield dividends are consistent, and its innovation strategies in digital marketing and sales bode well for future investments. This real estate company also finances commercial leasing and brand investment to generate investor dividends through in-person and digital sales. The ETF’s quality and growth filters consistently find winners and allows them to run, similar to the way the SPY does. At a yield of 1.7%, you get a dividend yield slightly higher than that of the SPY while hopefully enjoying stronger dividend growth. MAIN is the perfect monthly paying companion to ADC, because as ADC generally benefits from falling interest rates, MAIN benefits from rising (or relatively elevated) interest rates.

Also, it’s possible that a monthly dividend payment can bridge the gap when an emergency arises. What if my wife tells me that we have to shell out $5,000 for the kid’s braces and all I have are stocks that pay annually. I may have to sell out of a good stock before its payoff and that could cost me precious earnings power. The point is, the more frequent the dividend, the less an impact dividends have on buy and sell decisions. The business model is to issue equity and debt capital and extend loans at returns well in excess of its cost of capital.

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