Investing
5 Inflation-Fighting REIT Stocks to Buy Now That Pay Big Dividends Monthly
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There is an adage among real estate investors that “You can’t create any more land.” While you can always build higher, you still need the land. One of the best assets that most investors are underweighted on is real estate. Those that own a home are technically real estate investors, but homeownership does not produce any income, unless they are rental homes, which can be very capital intensive, not to mention time-consuming.
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Most growth and income investors who own the stocks of dividend-paying companies are content with the knowledge that four times each year the dividend payment will end up either in their account, or they buy more shares in a dividend reinvestment plan. While many companies pay on a calendar quarterly basis, we found five top real estate investment trusts (REITs) that pay their shareholders each month.
While all five are rated Buy at top firms across Wall Street, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
EPR Properties
If you are looking for fun this summer, this top company may very well own a chunk of the amusement park or property you travel to. EPR Properties Inc. (NYSE: EPR) is a leading experiential net lease REIT, specializing in select enduring experiential properties in the real estate industry.
The company is focused on real estate venues that create value by facilitating out-of-home leisure and recreation experiences in which consumers choose to spend their discretionary time and money. It has nearly $6.7 billion in total investments across 44 states. EPR Properties adheres to rigorous underwriting and investing criteria centered on key industry-, property- and tenant-level cash flow standards, and it believes a very focused approach provides a competitive advantage and the potential for stable and attractive returns.
Shareholders receive a 6.40% distribution. Raymond James has a Strong Buy rating and recently lifted its $62 target price to $64. The consensus target for EPR Properties stock is $56.94, and the stock closed on Tuesday at $52.50.
24/7 Wall St.Gladstone Commercial
This company announced a distribution increase for the fourth quarter. Gladstone Commercial Corp. (NASDAQ: GOOD) is focused on acquiring, owning and operating net leased industrial and office properties across the United States.
As of June 30, 2021, Gladstone owns a diversified portfolio of 121 office and industrial properties located in 27 states and leased to 106 tenants. The company has grown the portfolio in a consistent, disciplined manner at a rate of 18% per year since going public in 2003. It matches long-term leased properties with long-term debt to lock in the spread to create a durable, stable cash flow stream to fund monthly distributions to shareholders. Current occupancy stands at 96.5%, and that occupancy has never dipped below 95.0% since 2003.
Most importantly for investors, Gladstone has a track record of success, as exhibited by a history of strong distribution yields, consistent occupancy and more than 10 years of paying continuous monthly cash distributions.
Gladstone Commercial stock investors receive a 6.99% distribution. Colliers Securities has a Wall Street high $26 price target. The consensus target is $25.25. The shares ended Tuesday trading at $21.48.
Realty Income
This is an ideal stock for growth and income investors looking for a safer, inflation-busting idea. Realty Income Corp. (NYSE: O) is an S&P 500 company dedicated to providing stockholders with dependable monthly income. The company’s monthly dividends are supported by the cash flow from over 6,500 real estate properties owned under long-term lease agreements with commercial tenants.
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To date, the company has declared 608 consecutive common stock monthly dividends throughout its 52-year operating history and increased the dividend 109 times since its public listing in 1994. It is a top real estate member of the S&P 500 Dividend Aristocrats index.
Investors are paid a very solid 4.43% distribution. The $87 Goldman Sachs price target on Realty Income stock is well above the $77.25 consensus figure and the $67.45 per share close on Tuesday.
SL Green Realty
Many Wall Street analysts are very positive on this leading large-cap office REIT. SL Green Realty Corp. (NYSE: SLG), Manhattan’s largest office landlord, is a fully integrated REIT focused primarily on acquiring, managing and maximizing value of Manhattan commercial properties.
As of December 31, 2020, it held interests in 88 buildings totaling 38.2 million square feet. This included ownership interests in 28.6 million square feet of Manhattan buildings and 8.7 million square feet securing debt and preferred equity investments.
SL Green also participates in mezzanine lending to commercial real estate through its wholly owned structured finance portfolio and recently delivered One Vanderbilt, a 1.7 million square foot office tower uniquely located adjacent to Grand Central. The company recently reported that IBM has signed a 16-year lease for 328,000 square feet of office space at One Madison Avenue in Manhattan. More than 500,000 square feet of space will be added to the building’s 900,000 square feet in a new tower that is slated for completion in November of 2023, according to a statement.
Investors receive a 4.54% distribution. The Truist Financial target price is $92.75, and the consensus target is just $83.80. SL Green Realty stock closed on Tuesday at $80.57.
Stag Industrial
This strong industrial REIT play offers solid upside potential. Stag Industrial Inc. (NYSE: STAG) is a self-managed full-service real estate company primarily focused on the acquisition, ownership and management of single-tenant, Class B warehouses in secondary markets across the United States. The company continues to focus on expansion of its acquisition platform to find acquisitions to grow the portfolio.
Top Wall Street analysts expect management to be aggressive acquirers over time. Additionally, the in-place portfolio should deliver stable organic growth supported by healthy property-level fundamentals.
Investors receive a 3.55% distribution. Raymond James has set a $47 price objective, while the consensus target is $47.90. The closing share price on Tuesday was $41.03.
These five top companies pay dependable distributions. With the stock market still horribly overbought, inflation posting some of the biggest jumps in 40 years, and interest rates moving off generational lows, moving capital to hard assets now makes a ton of sense. Investors should remember that REIT distribution may contain return of principal.
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