Of the 7,500 plus stocks on the US exchanges, 15 real-estate investment trusts pay a monthly dividend. This article details the companies, their market capitalization, and their current dividend yield in 2021.
Note: We Hold No Positions in any of these stocks, nor do we have any business or personal relationship with any of the companies mentioned – this is a completely unbiased report for educational purposes and is not a recommendation to buy or sell any stock referenced.
Usually, investors searching for dividend stocks follow an “income strategy,” which means they seek to generate a steady income from their investments rather than a big capital gain through appreciation of the stock price with a “growth strategy.”
WHEN you get paid in an income investment strategy is almost as important as how much you get paid. With Monthly Income from Real Estate Investment Trusts, you get paid monthly, which allows your payments to compound faster; over the long-term, this is extremely beneficial for your bottom line.
15 REITS That PAY Monthly Dividends in 2021
|Ticker||Company||Industry||Market Cap ($M)||Dividend Yield|
|GOOD||Gladstone Commercial||REIT – Diversified||$680||8.10%|
|LTC||LTC Properties||REIT – Healthcare Facilities||$1,625||5.50%|
|LAND||Gladstone Land||REIT – Industrial||$445||2.90%|
|GRP.U||Granite REIT||REIT – Industrial||$4,537||4.10%|
|STAG||Stag Industrial||REIT – Industrial||$5,046||4.60%|
|AGNC||AGNC Investment||REIT – Mortgage||$8,626||9.00%|
|ARR||ARMOUR Residential REIT||REIT – Mortgage||$784||10.00%|
|BRMK||Broadmark Realty Capital||REIT – Mortgage||$1,380||8.10%|
|DX||Dynex Cap||REIT – Mortgage||$502||8.40%|
|ORC||Orchid Island Capital||REIT – Mortgage||$480||13.80%|
|SLG||SL Green Realty||REIT – Office||$4,621||5.40%|
|ADC||Agree Realty||REIT – Retail||$4,121||3.80%|
|O||Realty Income||REIT – Retail||$22,909||4.60%|
|WSR||Whitestone||REIT – Retail||$401||4.60%|
Table Data March 2021 – Data Provided By Stock Rover The Best ETF & Stock Research Software
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1. Gladstone Commercial – Dividend Yield 8.1%
Gladstone Commercial Corp is a real estate investment trust, which engages in investing and owning net leased industrial, commercial and retail real property and making long-term industrial and commercial mortgage loans. Its portfolio consists of single-tenant commercial, industrial real properties, and medical properties nationwide. Its principal investment objectives are to generate income from rental properties.
2. LTC Properties – Dividend Yield 5.5%
LTC Properties Inc is a healthcare facility real estate investment trust. The company operates one segment that works to invest in healthcare facilities through mortgage loans, property lease transactions, and other investments.
LTC generates all of its revenue in the United States and is an active capital provider in the seniors housing and health care real estate industry.
The company has been actively engaged with its operating partners to create a growing pipeline of projects. LTC considers merger and acquisition investment as a component of its operational growth strategy.
3. Gladstone Land – Dividend Yield 2.9%
Gladstone Land Corp is a real estate company primarily in the business of owning and leasing farmland. It focuses on the ownership of high-quality farms and farm-related properties leased on a triple-net basis to tenants with a strong operating history and deep farming resources.
4. Granite REIT – Dividend Yield 4.1%
Granite Real Estate Investment Trust, or Granite, is a real estate investment trust engaged in the acquisition, development, and management of primarily industrial properties in North America and Europe. Granite’s portfolio comprises various manufacturing, corporate office, warehouse and logistics, and product engineering facilities.
The vast majority of the company’s assets are logistics and distribution warehouses, and multipurpose buildings split fairly evenly amongst Canadian, Austrian, and U.S. locations.
Granite derives nearly all of its revenue in the form of rental income from its properties.
The company’s largest tenant is Magna International, an automotive parts and systems manufacturer, which accounts for most of Granite’s lease income.
5. Stag Industrial – Dividend Yield 4.6%
Stag Industrial Inc is a real estate investment trust primarily involved in the acquisition and operation of single-tenant industrial properties throughout the United States. The vast majority of the company’s real estate portfolio is comprised of warehouse and distribution buildings. Most of these facilities are located in Midwestern and Eastern U.S. states.
Stag Industrial derives nearly all of its income in the form of rental income from its portfolio of warehouse and distribution properties. The company generates most of its rental revenue from its facilities located in Midwestern and Eastern U.S. cities.
Stag Industrial’s largest customers include air freight and logistics, automotive, and industrial equipment companies in terms of overall revenue.
6. AGNC Investment – Dividend Yield 9%
AGNC Investment Corp is a real estate investment trust that invests in agency residential mortgage-backed securities.
The firm’s asset portfolio is comprised of residential mortgage pass-through securities and collateralized mortgage obligations for which the principal and interest payments are guaranteed by a U.S. Government-sponsored enterprise, such as the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, or by a U.S. Government agency, such as the Government National Mortgage Association.
It also invests in other types of mortgage and mortgage-related residential and commercial mortgage-backed securities or other investments in or related to the housing, mortgage or real estate markets.
7. ARMOUR Residential REIT – Dividend Yield 10%
ARMOUR Residential REIT Inc is a real estate investment trust that invests in residential mortgage-backed securities or RMBS. These are issued or guaranteed by U.S.-government-sponsored enterprises, such as Fannie Mae, Freddie Mac, or Ginnie Mae.
The company’s investment portfolio comprises mortgage-backed securities, adjustable-rate mortgage securities, and multifamily mortgage-backed securities.
In terms of total fair value, the vast majority of Armour’s investments are long-term, fixed-rate agency RMBS. Multifamily RMBS also represents a substantial amount.
Fannie Mae guarantees most of the company’s holdings.
Armour derives all of its revenue substantially as interest income from its investments.
8. Broadmark Realty Capital – Dividend Yield 8.1%
Broadmark Realty Capital Inc is an internally managed real estate investment trust offering short-term, first deed of trust loans secured by real estate to fund the acquisition, renovation, rehabilitation, or development of residential or commercial properties.
9. Dynex Cap – Dividend Yield 8.4%
Dynex Capital Inc is a real estate investment trust. It primarily invests in residential and commercial mortgage-backed securities. The company’s investments consist principally of Agency mortgage-backed securities, including residential MBS and commercial MBS.
10. Orchid Island Capital – Dividend Yield 13.8%
Orchid Island Capital Inc invests in residential mortgage-backed securities (RMBS) across the United States.
The principal and interest payments of its RMBS are guaranteed by the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, or the Government National Mortgage Association and are backed by single-family residential mortgage loans.
The company’s investment portfolio is divided into two categories: traditional pass-through Agency RMBS; and structured Agency RMBS, such as collateralized mortgage obligations, interest-only securities, inverse interest-only securities, and principal-only securities, among other types of structured Agency RMBS.
11. SL Green Realty – Dividend Yield 5.4%
SL Green is the largest Manhattan property owner and landlord, with around 46 million square feet of wholly-owned and joint venture office space.
The company has additional property exposure through its limited portfolio of well-located retail space.
12. Agree Realty – Dividend Yield 3.8%
Agree Realty Corporation operates as a fully integrated real estate investment trust primarily focused on the ownership, acquisition, development, and management of retail properties net leased to industry-leading tenants.
Some of its properties in the portfolio include 24 Hour Fitness, 7-Eleven, Wawa, PetSmart, among others.
13. Realty Income – Dividend Yield 4.6%
Realty Income owns roughly 6,500 properties, most of which are freestanding, single-tenant, triple-net-leased retail properties. Its properties are located in 49 states and Puerto Rico and are leased to 250 tenants from 47 industries.
Recent acquisitions have added industrial, office, manufacturing, and distribution properties, which make up roughly 18% of revenue.
14. Whitestone – Dividend Yield 4.6%
Whitestone REIT is a real estate investment trust (REIT) engaged in owning and operating commercial properties in culturally diverse markets in major metropolitan areas.
Its property portfolio includes retail and office/flex properties.
The company’s properties are primarily located in business-friendly Phoenix, Austin, Dallas-Fort Worth, Houston, and San Antonio. The organization derives revenue primarily in the form of rental revenues.
The Pros & Cons of Monthly Dividend REITS
1. Easier to manage
Like previously mentioned, income strategies can require some management to make dividend payments meet specific expenses. It can be difficult to meet recurring expenses with a quarterly or biannual dividend since many of those amounts are due on a shorter period basis.
Of course, income investors can build a portfolio that pays dividends every month by choosing stocks that reward shareholders in alternate months. Nevertheless, that is more difficult and can be more expensive (transaction costs) than choosing monthly dividend-paying investments.
2. Faster compounding
Whether to meet specific financial needs or to take advantage of the compounding, monthly payments can still have the upper hand against less-frequent payments. The more frequent the dividend, the faster it is reinvested. Obviously, the difference is small because each reinvestment amounts to 1/12 of the yearly dividend, but over a long period (decades), it turns into a sizeable amount.
3. Less volatility around the ex-dividend date
There is a date after which investors that buy the stock aren’t entitled to receive the next dividend; instead, they have to wait for the following payment. That date is called the “ex-dividend date.”
Imagine a company that pays an annual dividend of 5%. It’s easy to understand there will be many people trying to get the stock right before the ex-dividend date in hopes of getting 5% out of their investment without having to wait the whole year and being exposed to share price volatility. In the same way, there will be many people closing their position after they get their payment.
The larger the dividend yield, the larger the price swings around the ex-dividend date. When the dividend is spread throughout the year, each payment is smaller, translating into less volatility around these dates.
An income investment strategy isn’t intended to be a short-term strategy, but every once in a while, it’s healthy to reevaluate the portfolio, close some positions, and open new ones.
When the time comes, it can be frustrating having to wait for a dividend that’s distributed once or twice a year. Picture the situation where an investor sells the stock one or two months before the ex-dividend date, and the dividend is distributed once a year. This investor might have held the stock for ten or eleven months, and he still doesn’t get a cent in dividends. This will happen to a lesser degree to more frequent dividend payments.
However attractive, monthly dividends also imply some inconveniences:
5. Incremented expenses
Some companies mention increased costs for processing dividend payments which makes it more attractive for companies to pay dividends less often. If that’s the case, monthly payments can cost roughly 12 times as much as processing a single annual dividend. Could stocks have a higher dividend yield if they paid annual dividends?
6. Financial constraints
To pay monthly dividends, a company needs to have very disciplined financial execution. If its cash flow is exposed to some seasonality, the company may require external funds to pay dividends which could otherwise fund itself, provided it had some more time.
The business that makes monthly dividend-payments on stocks needs to be very stable – and even then, most companies are paying quarterly dividends – it can be a challenge to find the right investments, especially if you want to diversify.
Summary: Monthly REIT Dividend Stocks Summary
All of the REITS mentioned have a solid market capitalization and a positive dividend yield. Even though operating in different areas, they are all REITs with a dividend track record. With that being said, it might be smart to add other monthly dividend-paying assets like bonds for diversification purposes.
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Podcast 007 – Hedge Funds and REITS – Are they as good as they seem?
A close look at Hedge Funds and Real Estate Investment Trusts
- Published: Sun, 04 Mar 2018 23:00:00 GMT
- Duration 00:10:09