Income Investors: These 3 REITs Pay You a Dividend Every Month
12 Octobre 2021 - 3:19PM
Finscreener.org
One of the most cost-efficient
ways to generate passive income is by investing in
dividend-paying stocks.
While most companies pay you a dividend every quarter, there are a
few that have a monthly payout structure. Here, we look at three
real estate investment trusts or REITs that pay investors a
dividend each month.
AGNC Investment
AGNC Investment (NASDAQ:
AGNC) operates as a REIT
or real estate investment trust. It invests in residential mortgage
pass-through securities and collateralized mortgage obligations
where the principal and interest payments are secured by the
government-sponsored entities in the U.S. At the end of Q2, AGNC
had around $56.8 billion of mortgage-backed securities that were
secured. Its total investment portfolio stood at $58.4
billion.
These investments are funded
through collateralized borrowings that are structured as repurchase
agreements. It basically borrows capital at lower lending rates in
the short-term which are used to acquire higher-yielding long-term
assets, including mortgage-backed securities. AGNC aims to maximize
the net interest margins which is basically the difference between
long-term yields and the borrowing rates.
The REIT pays investors a monthly
dividend of $0.12 per share, indicating an annual payment of $1.44
per share. At its current price, AGNC stock offers investors a
forward yield of 8.93%.
While it makes sense to invest in
this REIT for steady gains, you should note that AGNC stock has
trailed the broader markets over the long term. AGNC stock is up
over 100% in dividend-adjusted returns in the last 10 years
compared to the S&P 500 gains of 345%.
LTC Properties
The second stock on my list is
LTC Properties (NYSE:
LTC) that has a monthly
dividend payout of $0.19 or $2.28 each year, indicating a forward
yield of over 7%. The company owns mortgages on 176 properties in
27 states in the U.S. It focuses on long-term care properties and
its portfolio is roughly split between senior housing and skilled
nursing developments.
The care properties segment was
hit hard amid COVID-19 and Senior Care Centers also filed for
bankruptcy protection last year. In fact, Senior Care accounted for
11
skilled nursing facilities in LTC’s
portfolio.
Despite macro-economic pressures,
LTC Properties maintained its dividend yield and is experiencing an
uptick in admissions across properties since the start of 2021. The
accelerated pace of the COVID-19 vaccination rollout is now acting
as a massive tailwind for LTC which will result in a lower payout
ratio for the company in Q4 and beyond.
Shares of LTC Properties have
returned 108% in the last 10 years and have declined by 14.5% since
October 2016.
Stag Industrial
The final stock on my list is
Stag Industrial (NYSE:
STAG) which is focused on
the acquisition and operation of single-tenant, industrial
properties in the U.S. The stock is up 30% in the last year and has
returned 130% to investors in the last five years. Since October
2011, Stag Industrial shares have risen close to 600% in dividend
adjusted returns.
Despite these market beating
gains, it offers investors a forward yield of 3.6% and its dividend
payouts have increased for seven consecutive years.
Stag Industrial focuses on the
acquisition of single-tenant industrial properties. Around 40% of
its portfolio is connected to the e-commerce sector and no single
company accounts for more than 4% of total revenue. It ended Q2
with an occupancy rate of 96.8% and over 70% of its leases have
contracts extending beyond 2023.
Stag Industrial also has a
financially sound balance sheet with a net debt to adjusted EBITDA
multiple of 4x.
AGNC Investment (NASDAQ:AGNC)
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AGNC Investment (NASDAQ:AGNC)
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