5 Monthly Dividend REITs to Buy Now

While most real estate investment trusts (REITs) generally offer higher than average dividend yields, monthly dividend REITs also offer investors a steady source of income due to their frequent distributions.

REITs generally offer high dividend payouts because of their tax status. To maintain the favorable tax status which allows REITs to have no corporate tax liability, these legal entities must distribute almost all of their earnings as dividends. To qualify for taxation as a REIT, these equities must distribute at least 90% of their earnings as dividends to their stakeholders. These incentives push dividend payouts amounts and yields to levels that are generally higher than the yields of many other equity types.

The monthly dividend payouts are frequent enough to align well with investors’ monthly expenses. This fact is also important for many investors who are on a fixed income, such as retirees. While seeking high dividend yields with a reliable income flow, investors also look for equities that offer at least minimal capital gains to accompany the high dividend yields in order to ensure overall gains.

Since a dividend yield could rise because of a falling stock price, asset appreciation in excess of the dividend yield indicates that the share price contributed to the equity’s total returns and did not offset any dividend gains over the trailing one-year period. Despite the importance of total returns, the five high dividend REITs below are sorted by their current dividend yields in ascending order.

5 Monthly Dividend REITs to Buy Now: #5

Gladstone Land Corporation (NASDAQ:LAND)

Dividend Yield: 4.5%

The Gladstone Land Corporation is a publicly traded REIT that invests in farmland and farm-related properties that are located in major agricultural markets in the United States. The REIT then leases this land to unrelated third-party farmer-tenants.

This REIT has enhanced its annual dividend payout for the past five consecutive years. Over those five years, the annual dividend amount rose nearly 50%, which corresponds to an average growth rate of 8.1% per year.

LAND’s share price declined during the three years after its establishment in 2013. However, the share price has since reversed its trend and has advanced more than 70% since the beginning of 2016. Over the past twelve months, the share price has pulled back. This has offset some of the dividend income and reduced the 4.5% dividend yield to a total return of 2%. However, the total gains over the past five years have exceeded 28%. Concurrently, a significant share price decline in late 2015 has pushed the three-year total return to more than 35%.

5 Monthly Dividend REITs to Buy Now: #4

LTC Properties, Inc. (NYSE:LTC)

Dividend Yield: 4.54%

Headquartered in Westlake Village, California, and founded in 1992, LTC Properties, Inc. operates as a health care REIT. The company invests in senior housing and long-term health care properties, including skilled nursing properties, assisted living properties and independent living properties through mortgage loans, property lease transactions and other investments.

Unlike many other equities that slashed their dividends drastically in the aftermath of the 2008 financial crisis, LTC merely paid a flat annual dividend in 2009 and resumed its annual dividend hikes the following year. Since suspending dividend payouts in 2001, LTC has advanced its annual payout by 440%. This corresponds to an average annual growth rate of 10.4%.

The $0.18 current distribution is nearly 6% above the $0.17 payout amount from last year. This current monthly payout converts to a $2.16 annual payout and a 4.54% forward dividend yield.

LTC Properties has supported its rising dividend distributions with steady capital gains as well. Just over the past 12 months, shareholders have enjoyed a combined total return of 25.3%, which is higher than the equity’s three-year total return. Furthermore, the total returns over the past five years are approaching 50%

5 Monthly Dividend REITs to Buy Now: #3

STAG Industrial, Inc. (NYSE:STAG)

Dividend Yield: 4.63%

Headquartered in Boston and incorporated in 2011, STAG Industrial, Inc. is an industrial real estate operating company that focuses on the acquisition, ownership and operation of single-tenant industrial properties throughout the United States. The company has boosted its annual dividend payout amount every year since its formation in 2011. The current $0.119 monthly distribution is equivalent to a $1.428 annual payout and currently yields nearly 4.7%.

In addition to a steady dividend income, the company has also enhanced its share price nearly 17% over the last year. Furthermore, the share price has nearly doubled since its five-year low in February 2016. The total return from the combined benefits of rising dividends and asset appreciation has exceeded 20% during the trailing 12-month period. However, a share price pullback of more than 40% during 2015 allowed the recovering share price to deliver a total return of 61% over the trailing three years. Because the share price was higher five years ago than it was three years ago, the total return of 53% over the past five years is lower than the three-year total return.

5 Monthly Dividend REITs to Buy Now: #2

Gladstone Commercial Corporation (NASDAQ:GOOD)

Dividend Yield: 6.34%

The Gladstone Commercial Corporation is a publicly traded REIT that pays monthly cash distributions to its stockholders and invests in net leased industrial, commercial and retail real property. It also selectively makes long-term industrial and commercial mortgage loans.

The company’s current $0.125 monthly dividend amount corresponds to a $1.50 annualized payout and currently yields 6.52%. While robust asset appreciation has suppressed the current yield below the company’s own 7.8% yield average over the last five years, Gladstone Commercial Corporation current yield is more than twice the 3.04% average yield of the entire Financial sector. Additionally, GOOD’s current yield has also outperformed the 6.29% simple average yield of the Closed-End Fund — Equity industrial segment.

Furthermore, the Gladstone Commercial Corporation’s asset appreciation has combined with the dividend income to produce total return of nearly 35%. Additionally, this REIT has also delivered to its shareholders a 68% total return over the past three years and a more than 72% return over the last five years.

5 Monthly Dividend REITs to Buy Now: #1

Whitestone REIT (NYSE:WSR)

Dividend Yield: 8.06%

 Whitestone is a community-centered retail REIT which owns and manages “e-commerce resistant” retail centers that are principally located in Phoenix, Austin, Dallas-Fort Worth, Houston and San Antonio. This REIT’s mix of national, regional and local tenants offers customers the ability to purchase daily necessities, needed services and entertainment.

The company has been paying the same $1.14 annual payout since the onset of its dividend distributions in 2010. This annual payout is equivalent to an 8.06% forward dividend yield. While slightly below its own 8.53% five-year yield average, the current yield is more than twice the 3.8% average yield of the entire Financial sector and 40% higher than the 5.75% yield average of the Diversified REITs industry segment.

The share price has advanced nearly 40% since its five-year low in March 2018 and has also advanced more than 21% since its 52-week low in March 2019. This asset appreciation has combined with a steady dividend income to produce a total one-year return of more than 10% and a 41% total return over the past three years.

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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.