For the most part, dividend investing rewards the patient. That's because the standard dividend payment cycle is once per quarter, meaning a mere four times per year.
It is, of course, very nice to be paid more frequently. While there aren't a great many companies that distribute a payout each and every month, they do exist; you just have to know where to look. Here are two real estate investment trusts (REITs) that space out their dividend in terms of only weeks, not quarters: Realty Income (O +0.27%) and Apple Hospitality REIT (APLE +0.29%).
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1. Realty Income
Most people, we can safely assume, don't spend much time thinking about companies that pay monthly dividends. But when those thoughts do arise, we can also safely bet that the first name that often comes to mind is Realty Income. The company, which concentrates on retail properties, has been doling out monthly dividends for decades now.
Retail is a good sector to be deeply involved in these days. The pandemic seems to finally, finally be abating (although we should remain cautious about this). As a result, people are conducting normal activities like shopping, going to the movies, and eating in restaurants.
NYSE: O
Key Data Points
This very much plays to the strength of Realty Income, whose foundational business strategy is to lease to tenants resistant to the retail apocalypse. That means places that offer retail experiences that can't be easily duplicated -- going to the cinema to see a first-run film, for example, or spending a leisurely night with your sweetheart at a cozy restaurant.
Realty Income tends to lease on long-term contracts, and its tenants are typically top operators in their industries. As a result, occupancy is consistently high.
As of the end of March, for example, its occupancy rate was 98.6%. Even in the thick of the pandemic, that figure didn't dip much below 98%, which says something about the durability of that portfolio. It's also telling that the REIT can maintain those numbers with nearly 11,300 properties on its asset list.
That latter number is sure to grow, as Realty Income is an opportunistic and ever-hungry acquirer of new properties. That, combined with the rent raises it usually mandates in its contracts, should keep the growth train running. It should also maintain the buoyancy of that monthly dividend, which at a shade under $0.25 per share currently yields a sprightly 4.4%.
2. Apple Hospitality REIT
Another REIT devoted to a monthly dividend payout is Apple Hospitality, an operator of hotels.
If you think retail was hard hit during the pandemic, spare a thought for the world's hotel operators. Travel slowed sharply, to the point where empty lobbies and unoccupied rooms were very much the norm and not the exception.
What a difference a couple of years make. Travel and hotel occupancy are roaring back, and the shine is back on companies like Apple Hospitality.
NYSE: APLE
Key Data Points
From collective occupancy numbers that at one point dipped below 20% in mid-2020, the company's properties are on a sharp upward rise. In the first three months of the year, the metric was a consecutive 56%, 69%, and 76%. And in sharp contrast to the $46 million net loss in 2021's first quarter, this year's inaugural quarter saw the REIT post a more than $18 million profit.
Profitability isn't the only financial metric making a roaring comeback for Apple Hospitality. After sensibly suspending its monthly dividend in early 2020, the company reinstated its distribution on a quarterly basis the following year. And at last, early this year, it put it back on the monthly clock; since March, it's landed in investors' pockets every few weeks.
Unless the pandemic worsens again, Apple Hospitality is beautifully poised to benefit from an outstanding period in travel.
Demand from restless wanderers is through the roof, planes to major destinations are stuffed with passengers, and both business and leisure travelers are busy booking hotel rooms. As a manager of a clutch of hotels (219 in total) spread judiciously across the U.S., Apple Hospitality will be happily busy filling those rooms, and it should profit commensurately.
The REIT's recently reinstated monthly payout currently stands at $0.05; at the latest closing share price, this shakes out to a yield of 3.5%.
