5 REITs That Pay Monthly Dividends

This leading cell tower REIT has increased its dividend at an average annual rate of roughly 20% since 2012. An investment-grade balance sheet showing roughly $1.5 billion of liquidity gives this REIT plenty of dry powder for acquisitions and development. At the same time, Rexford’s rising dividend remains well-covered, with payout ranging around just 57% of FFO.

  1. REITs can be great for generating higher yields, but they also tend to be very economically sensitive.
  2. Based on expected 2021 FFO per share of $1.48, the REIT trades for a price-to-FFO ratio of just over 12.6.
  3. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
  4. 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.
  5. You’ll also get lifetime access to our Investor Portal and exclusive investor resources.

Choose REITs with simple, understandable business models that have a long track record of paying and increasing their dividend. But it comes with the risk of ongoing share price declines and additional dividend cuts. For many investors that trade-off isn’t worth it, particularly when the economic outlook remains uncertain. Reverse stock splits don’t change a company’s capitalization–they only reallocate the market value into a smaller number of shares. Because each share represents a larger slice of the company after the split, the stock price rises. Dividends from U.S. companies and eligible foreign companies are usually taxed at the lower capital gains rates.

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Funds from operations (FFO) per share was 85 cents, besting estimates by two cents. Its current growth drivers include its acquisition spree, which takes place at extremely low-cost financing (Alpine just borrowed $60 million with a 5-year term at just 2.16%), as well as rent escalations. About 45% of its annualized base rent is subject to rent escalations. At the end of the quarter, the trust’s Weighted-Average Remaining Lease Term was 8.0 years and was 100% occupied. We expect AFFO/share at the higher end of this range, given the trust’s explosive results.

FFO per share (funds from operations, a key REIT metric) was flat year-over-year at 36 cents during the June quarter, but amply covered CTRE’s 27.5 cents per-share quarterly dividend. All of the companies featured here have been reliably raising payouts in recent years and boast five-year average annual dividend growth of at least 8.8%. What’s more, these REIT dividends are well-positioned for continued growth thanks to the companies’ solid long-term fundamentals. In 2022, net income was $869 million while FFO available to stockholders was above $2.4 billion, a sizable difference between the two metrics. This shows the profound effect that depreciation and amortization can have on the GAAP financial performance of real estate investment trusts.

Outlook For REITs

Investors looking for consistent REIT dividends will find a winner with CCI. Over the past five years, Crown Castle has grown its dividend 9% annually, on average. The REIT is committed to delivering at least 7% to 8% dividend growth per year and room to hike its payment is enabled by a 77% payout from FFO. Dividend safety is also enhanced by the REIT’s investment-grade https://1investing.in/ balance sheet. CareTrust REIT (CTRE, $21.27) acquires and leases senior housing and healthcare properties to many of the country’s leading regional and national healthcare chain operators. The company’s current portfolio consists of 198 properties totaling 21,537 beds distributed across 21 states, with major concentrations in Texas (23%) and California (28%).

So while you can earn higher yields with REITs, taxes will consume some of the difference. You can avoid that problem temporarily by holding REITs in tax-advantaged accounts such as traditional IRA, Roth IRA, 401 (k) and more. REITs return value to shareholders in two ways—share price appreciation and dividend yield. REITs are prime investment choices for many investors due to the regular income they provide and their liquidity. They often offer attractive returns and can help to diversify a portfolio focused on equities and bonds.

LTC Properties Inc. % dividend LTC %

However, I have a similar concern with asset quality and the frequency in dividend cuts over the years. That’s what Josh Peters (in The Ultimate Dividend Playbook) refers to as a “sucker-yield” stock. In terms of diversification, there are over 140 US equity REITs and around 36 mortgage REITs. Instead of owning 20 duplexes in one town, I can invest in 5 REITs that own properties in 50 states. There is really no limit to diversification and the number of sub-sectors is increasing every year. Although not the only metric, I consider a consistent dividend increase to be a primary ingredient in my SWAN (sleep well at night) portfolio in my monthly newsletter.

REITs That Pay Monthly Dividends And 1 Great One That Does Too

STAG primarily leases its buildings to single tenants in a large number of markets. As a result, it doesn’t have to contend with the constant turnover that multi-tenant properties like shopping centers and office parks often experience. And it achieves a healthier diversification than companies focused on a few primary markets Its weighted average lease length is about 4.7 years. This REIT’s portfolio consists of a diversified grouping of more than 12,400 free-standing commercial properties that are leased to over 1,250 retail and industrial clients in 84 industries. The company has a presence in all 50 U.S. states, as well as in Puerto Rico, the United Kingdom, Spain, and Italy.

EPR Properties has done an excellent job since it cut its dividend in 2010. I believe the continued diversification into non-cinema related assets is helping to grow confidence as well as the company’s prudent capital management. However, I believe there are better Triple Net REITs that provide better risk-adjusted returns. On September 18th the REIT disclosed the monthly cash dividend rate for the company’s common stock of 5 cents per share for the fourth quarter, a decrease from its previous dividend of 7 cents per share. But this has resulted in a rare opportunity to buy ADC at just 13.5x FFO and a high 5.5% dividend yield, which is paid on a monthly basis. To qualify as a REIT, a company has to pay out 90 percent or more of its taxable income in dividends to investors.

In addition, many large corporations are relocating their headquarters to tax-friendly Sunbelt states, bringing thousands of workers with them. The demand for skilled nursing facilities is forecast to increase steadily over the next decade due to an aging U.S. population. You might also be looking to create a highly customized dividend income stream to pay for life’s expenses. UMH Properties is one of the largest manufactured housing landlords in the United States. It was founded in 1968 and currently owns tens of thousands of developed sites and over one hundred communities located across the midwestern and northeastern United States.

Modest payout at only 54% of FFO leaves plenty of room for another double-digit dividend hike down the road. 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. Demand in the U.S. warehouse space is strong, and, at the current rate of leasing, all available space is anticipated to dry up within the next 16 months. The supply-demand imbalance is reflected in Prologis’ high 97.4% occupancy rate and whopping 45.6% rent growth from new and renewed leases during the June quarter.

Strong Balance Sheets, Low Stock Prices

With 40 premium hotel brands and locations across 15 states, Chatham Lodging Trust offers access to the hospitality industry. Its strategy is to place hotels in areas of high demand reits that pay monthly but with low supply. The trust doesn’t just own hotels, it aids in the strategy involved in operating them, including revitalization, rebranding and even redevelopment.

Companies that pay quarterly (or semi-annually) almost always announce the payment of their next dividend payment at the time of the payment period. Alternatively, 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. Real estate investment trusts (REITs) can serve as consistent income-producing stock picks for investors by paying out 90% or more of profits to shareholders. The company’s fundamental strength is helping to reward investors seeking out REIT dividends.

Invest in REITs with monthly dividends today with Interactive Brokers. It is Manhattan’s largest office landlord, with 77 buildings totaling 35 million square feet. New York has one of the lowest rates of occupancy of office space in the U.S., with 19.5% occupancy right now. We see Omega’s growth at just 2% annually, which is well below its historical average of more than 5%.


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