Dividend investing is a great way to generate wealth from money entrusted to publicly held companies. Those regular payouts can help with budgeting -- and boost the budget -- by providing a predictable flow of cash for retirees or anyone else living on their investments.
The vast majority of dividends are paid quarterly, but there are about 60 publicly traded companies that pay dividends monthly. Among them are a couple of dozen real estate investment trusts (REITs), pools of income-producing assets whose operators are required by law to pay out at least 90% of their taxable income each year to shareholders.
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Many of these are mortgage REITs, which are particularly sensitive to interest rate movements, or equity REITs that trade over the counter, often with market caps so small and volatile that income investors tend to steer clear.
Here are three REITs on the New York Stock Exchange that have proven records of not only reliably paying out each month, but providing investors with regular pay raises, too.
NYSE: O
Key Data Points
1. Realty Income
Realty Income (O 0.26%) brands itself "The Monthly Dividend Company," and it backs that boast with a record of 631 consecutive such payments. The company also has raised its dividend 118 times since it began trading publicly in 1994.
Realty Income has grown over the years through acquisitions and mergers to become perhaps the biggest name in retail REITs, with a collection of more than 11,700 commercial properties, primarily in the U.S. but also with a growing presence in Spain and the U.K.
Shares in this San Diego-based net-lease company (meaning tenants pay most of the costs of operating a property) are currently selling for about $66 and yield about 4.4%.
NYSE: ADC
Key Data Points
2. Agree Realty
Agree Realty (ADC 0.93%) is another net-least retail REIT that's much smaller than Realty Income, with a portfolio of about 1,800 properties across the U.S. Like its larger peer, Agree went public in 1994, and it too has rewarded investors nicely, providing a compound average annual return of 12.5% over that time.
Agree's portfolio is equally strong, led by Walmart and a long lineup of other recession-resistant stalwarts including Kroger, Dollar General, Home Depot, and Tractor Supply.
Agree switched from quarterly to monthly payouts in January 2021 and since then has given its investors four raises, maintaining a 10-year streak that has provided an average annualized increase of 6.1%. Stock in this suburban Detroit-based REIT sell for about $72 a share and yield about 4%.
NYSE: STAG
Key Data Points
3. STAG Industrial
Unlike the other two REITs discussed here, STAG Industrial (STAG 0.25%), as its name indicates, is an industrial REIT. It's the only one of its kind among the couple of dozen REITs that pay monthly dividends.
STAG focuses on providing income and growth for investors through a portfolio of 563 buildings in 41 states that provides logistics and distribution space for a diverse list of tenants, including such titans as Amazon.
This Boston-based operation is comparatively young -- it went public in 2011 -- but it's building a solid record of raising dividend payouts by providing reliable tenants with high-demand space.
When STAG raised its dividend by 6.5% to $0.1225 per share beginning last month, that marked a decade of at least one increase per year since the company began monthly payments in October 2013. The stock now yields about 4.1% at a share price of roughly $35.
Three choices for supplementing income with a side of growth
Realty Income, Agree and STAG each have the balance sheets, manageable payout ratios, and well-managed, heavily occupied portfolios full of reliable tenants, to continue providing investors with a predictable flow of monthly income and the occasional bump to boot.
Any or all could nicely supplement the fixed-income assets and growth-oriented stocks that together comprise a balanced portfolio that fits your investment goals and risk appetite.
