Monthly Dividend Stocks: STAG Industrial, Inc. (NYSE:STAG)
By: Ned Piplovic,
STAG Industrial, Inc. (NYSE: STAG) — an industrial real estate investment trust (REIT) and one of the monthly dividend stocks — continues rewarding its shareholders with steady dividend distributions and has boosted its annual dividend payout every year since its formation in 2010.
While the REIT’s current 4.8% dividend yield is slightly below the company’s five-year average, it still outperforms the average yields of STAG’s peers in the overall Financials sector and the Industrial REITs market segment.
The share price traded relatively flat in the first half of the trailing one-year period. Pressured by the overall market correction in late 2018, the share price dropped to nearly 15% below the price level from the onset of the trailing 12-month period. However, the share price recovered those losses within 30 days and rose higher to new all-time highs in 2019. Since then, STAG has recovered more than 70% of that loss and has pulled nearly even with its share price from one year ago.
A share price decline in late 2018 pushed the 50-day moving average below its 200-day equivalent in early-December 2018. The 50-day average continued distancing itself from the 200-day average. Except five small dips below the 50-day average in April and May, the share price traded above both moving averages since mid-January 2019. The movement of the averages and the share price in 2019 indicate that the share price might extended its current uptrend at least a little longer.
As one of the monthly dividend stocks, STAG Industrial delivers dividend distributions more frequently than stocks with a quarterly dividend payout schedule. Therefore, interested investors who agree with the current technical indicators that the price uptrend might continue, have multiple opportunities to take a position in the stock and claim eligibility for the next round of dividend distributions. Similar to most other monthly dividend stocks, STAG Industrial maintains its pay dates in the middle of the month, with the corresponding ex-dividend dates occurring approximately two weeks earlier at the end of the previous month. The next ex-dividend date will occur at the end of July, and the corresponding pat date will be set for mid-August 2019.
STAG Industrial, Inc. (NYSE:STAG)
Founded in 2010 and based in Boston, STAG Industrial, Inc. is a real estate investment trust (REIT) that acquires, owns and operates single-tenant, industrial properties throughout the United States. As of June 2019, the company owned and operated 395 buildings with a total usable commercial area of almost 76 million square feet across 38 states. The company currently leases its facilities to 359 tenants from diverse industries and sectors, with a well-staggered lease maturity schedule and a weighted average lease term of 4.9 years. In 2018, the company invested $677 million — a 22% increase over 2017 — to acquire 47 additional buildings of industrial real estate at a 6.9% weighted average capitalization rate — the rate of return on a real estate investment property based on the income that the property is expected to generate. The company has managed a tenant retention rate of approximately 70% since its IPO and has a current occupancy rate of 94.7%.
Monthly Dividend Stocks: STAG Industrial Dividend
STAG’s current monthly dividend payment of $0.1192 is 0.8% higher than the $0.1183 distribution from the same period last year. This new monthly dividend payout amount is equivalent to a $1.43 annualized distribution and corresponds to a 4.8% forward dividend yield.
While STAG continues enhancing its monthly dividend distributions, the company’s share price growth pace remains ahead of the dividend growth rates. Therefore, even with the rising dividends, the current dividend yield is nearly 12% below the company’s own 5.5% average yield over the past five years. However, despite trailing its own five-year average, STAG’s current yield is ahead of industry averages.
As of June 2019, the 4.8% yield is more than 56% above the 3.09% simple average of all equities in the Financial sector. Furthermore, the current yield also outperformed by 50% the 3.22% yield average of STAG’s peers in the Industrial REIT market segment. Moreover, even excluding equities that do not distribute dividends from the calculation raises the segment’s average yield only to 4.12%. The STAG’s current yield outperformed even this average yield of the sector’s only dividend-paying equities by more than 17%.
STAG Industrial has offered its shareholders dividend hikes every year since the REIT’s inception in 2011. Over that period, the trust enhanced the total annual dividend payout amount 53%. This pace of advancement corresponds to an average growth rate of 5.5% per year.
Monthly Dividend Stocks: STAG Industrial Share Price
The share price gained a little more than 6% early in the trailing 12-month period. However, those gains were short-lived because the overall market and most other equities declined significantly in the last quarter of 2018 on trade war with China fears and uncertainties about interest rates.
However, after bottoming out at $23.27 on December 24, 2018, the share price rebounded quickly and erased all its losses since mid-2018 by mid-January 2019. The uptrend continued until the share price reached its new all-time high of $31.56 on June 20, 2019, for a gain of more than 26% above the 52-week low from late-December 2018. After peaking in mid-June, the share price pulled back to close on June 26, 2019, at $29.63. This closing price was 9.1% higher than it was one year earlier and 27.3% above the 52-week low from Christmas Eve 2018. A pullback in 2015, limited the five-year asset appreciation to 24%.
The combined benefit of rising dividends and capital gains delivered a total return of 17.5% over the trailing 12 months. The total return over the past three years was 49% and the shareholders enjoyed a 55% total return over the past five 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.