Do you pay your bills monthly or quarterly? For most people, budgets are on a monthly schedule. Unfortunately for people who depend on dividend income, business results are calculated and reported on a quarterly basis. This means that you have to wait three months between dividends for most dividend paying stocks. While it would help to see this money coming into your account more frequently, you might want to consider the handful of companies that hand out checks to shareholders each month.
SL Green (NYSE: SLG) is a real estate investment trust (REIT) that owns commercial space in 88 buildings in Manhattan. He claims to be the largest owner of offices in New York. The REIT pays a dividend of $ 0.30 per share each month, resulting in a forward yield of 5.04%. SL Green changed from quarterly dividends to monthly dividends after March 2020.
The REIT has done a great job collecting a high proportion of the rent owed by tenants throughout the pandemic crisis, and its operating funds (FFO) are high enough to cover the current dividend. He was even confident enough at the end of 2020 to announce a special stock dividend of $ 1.6967 per share that was paid in January. However, investors should be careful to assess the risks associated with commercial real estate in major markets that could experience disruption caused by remote work and the so-called urban exodus.
Real estate income
Real estate income (NYSE: O) is another REIT with over 6,500 properties, most of which are under long-term contracts triple net lease The agreements. The trust targets recession-resistant customers such as drug stores, dollar stores, convenience stores and grocery stores. Realty Income is also exposed to gyms and theaters, which have suffered tremendously over the past year. The cinema part is particularly troublesome – many media executives speculate that traffic in theaters is constantly lower due to changing consumer tastes and streaming. Always, AMC Entertainment Holdings (NYSE: AMC) contributes only 2.7% of the REIT’s contractual rental income.
Real estate income is a Dividend Aristocrat with a long history of increasing dividends. It is earning a return of 4.4% and the dividend was around 84% of the adjusted FFO in the most recent quarter. Even with the current economic crisis, Realty Income is producing more than enough cash to cover its distributions. As the economy recovers, it is reasonable to expect the REIT to continue raising the dividend.
OK Real Estate
OK Real Estate (NYSE: ADC) is a REIT that owns over 1,100 commercial properties in 46 states. Most of the tenants are national chains with large format locations, such as grocery stores, home renovations, and general merchandise. This ties Agree’s long-term success to brick-and-mortar retail sales, but many of its tenants have proven resilient to recessions and e-commerce disruptions.
Agree changed from quarterly dividends to monthly dividends in February 2021. Prior to that, the REIT had steadily increased its quarterly distributions from $ 0.40 per share in 2011 to $ 0.62 in January of this year. The stock now pays $ 0.207 per share each month, producing a return of 3.7%. The adjusted FFO per share was 134% of cash distributed to shareholders in the quarter, so the trust is generating enough profit to support its current payout, even with the economic downturn.
Horizon Technology Finance
Horizon Technology Finance (NASDAQ: HRZN) grants loans to backed by venture capital (VC) start-up. There aren’t many publicly traded companies with this kind of strategy, and most of the competition is bigger with more diversified operations. It’s a pretty risky strategy, but careful underwriting can yield extraordinary results.
Horizon’s lending activities create a monthly income stream from interest, which is reliable, assuming lenders avoid default. There is an increased risk of default when lending to early stage growth companies, but Horizon seeks to offset this risk by taking mandates included in loan contracts with these start-ups. Warrants offer upward appreciation with these high risk, high yield companies.
Horizon is paying $ 0.10 per share each month right now, a forward yield of 8.36%. The monthly distribution has not changed for years. Unlike the other stocks on this list, Horizon’s goal is not to slowly and steadily increase shareholder income. Instead, Horizon aims to provide cash income for investors to wait until the company’s holdings create an even more valuable entity.
LTC Properties (NYSE: LTC) is a specialty REIT with 184 healthcare facilities, most of which are skilled nursing or acute care facilities. Demand for the services provided by LTC tenants is largely recession-proof and demographics are favorable. Life expectancy is increasing for people who reach old age, and elderly care solutions are also expanding. As the number of people over 80 increases in the United States, so will the demand for long-term care facilities. This is good news for the shareholders of LTC Properties.
Shareholders receive $ 0.19 per share each month from LTC, an attractive yield of 5.38%. With an FFO adjusted to 137% of dividend in the last quarter, this REIT could be a more stable game than commercial and residential property owners facing pandemic-related disruptions. Investors should note that LTC has not increased its monthly distribution since 2016, and even then, it only increased by a dime each month.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.Source link