Top Monthly Dividend Stocks Include Gladstone Land Corporation

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monthly dividend stocks

Top monthly dividend stocks to buy during the COVID-19 pandemic include Gladstone Land Corporation (NASDAQ: LAND).

Gladstone Land Corporation is a real estate investment trust (REIT) which acquires and owns farmland located in major agricultural markets throughout the United States. Gladstone Land leases its farm properties to unrelated third-party farmers.

The company owns 113 farms, amounting to 88,000 acres of land in 10 different states. Gladstone Land, founded in 1997, went public in 2013, and began to pay a monthly dividend.

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Performance of Gladstone Land Corporation: One of the Top Monthly Dividend Stocks

Gladstone Land’s stock price has been on a five year upward trend. In 2015, the stock price reached the $10 range, and it has trended upward to its current stock price of $14.29. The price per share took a substantial hit in March 2020, falling all the way to $9.66, as a result of the financial crisis. Since then, the stock has demonstrated its resilience, as it has made an impressive recovery. Its current stock price is not far off its 52-week high of $16.76.

Gladstone Land has a history of delivering returns to its investors. The company has provided its investors with total returns of 24.80% over the last 12 months and 80.62% over the last five years. These consistent returns make LAND an attractive stock for investors. 

Gladstone Land has achieved consistent revenue growth over the past 5 years, which can be attributed to the company’s regular increases in acquisitions. For example, Gladstone Land acquired two new farms in Q2 2020 for approximately $17.7 million. The renewed lease of one farm is expected to result in an increase in annual net operating income of approximately $161,000, or 26.6%. This is in addition to its 12 new acquired properties in 2019.

The company is now reaping the benefits of its recently acquired properties as they begin to bring in revenue. The 12 acquisitions in 2019 were considerably higher than the eight property acquisitions that the company made in 2018. Gladstone Land is constantly increasing its revenue by adding new sources of income via property acquisitions. The company is achieving sustainable growth, which is largely valuable to investors.

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Current Dividend Yield and Payouts

Gladstone Land is currently paying out $0.0448 per share to its investors on a monthly basis, making an annualized payout of $0.54. Its current dividend yield is 3.82%. The company has paid 86 consecutive monthly dividends since 2013, and has increased its dividend 18 times over the prior 21 quarters. Gladstone Land has attained consistent growth in its dividend over time, boasting a five-year dividend growth rate of 8.22%. 

Price/Earnings Ratio

Gladstone Land has a current price-to-earnings (P/E) ratio of 21.44. LAND’s P/E ratio is above industry average, but it actually is relatively low considering the current rate of profit growth and the company’s consistent dividend increases. It is important to keep in mind that investors are willing to pay more for companies that consistently increase their  dividend payouts. 

Comments from Gladstone Land Leadership 

David J. Gladstone, the CEO of LAND, is confident that his company will do well going forward following the current economic crisis. Gladstone spoke in its Aug. 5 earnings call, noting that the company is “in position to have a very good year”, and that “Operating results for the second quarter came in as expected, when compared to the slow start in 2019, and the team has a very healthy list of new farms they are seeking to acquire. The company’s farms continue to be 100% leased, and the team continues to have success with lease renewals at higher rental rates, which we believe indicates the strong demand by growers for the company’s farms.”

Gladstone also mentioned in the company’s Aug. 5 press release that the impact on its operations continue to be minimal as most of LAND’s tenants sell their products to grocery stores. Additionally, the company made two recent acquisitions that offer growth opportunties.

It is a promising sign that the company still has been able to pursue regular business ventures coming out of the financial crisis. It was announced on Sept. 1 that LAND acquired 939 gross acres of farmland in Maryland’s Eastern Shore and Delaware for approximately $7.4 million. The second announcement came on Sept. 8 and indicated that LAND has acquired 2,515 gross acres of farmland, including planted acres of pistachio trees, in Fresno County, California, for approximately $31.8 million.

Why dividendinvestor.com concludes Gladstone Land Stock is a Buy 

  • Gladstone Land has demonstrated strong financial health that can propel carry it through the current financial crisis. Investors can have peace of mind that Gladstone Land will likely not face significant negative implications due to the pandemic. 
  • Its outlook is for steady and consistent revenue and profit growth during the past five years.
  • LAND pays a consistent dividend, providing investors with reliable monthly income.

Key Risks for Gladstone Land Corporation

  • Tenants’ inability to pay rent: poor growing seasons and other challenges that farmers face may decrease their revenue and leave them unable to pay rent.
  • Farm labor shortages could make it difficult for growers to stay in business

Competitive Analysis

The chart below compares Gladstone Land Corporation (LAND) to its only competitor, Farmland Partners Inc. (FPI), in terms of various financial metrics. 

 

LAND  FPI
Current Stock Price $14.29 $6.59
Market Cap 317.30 M 195.04 M
Beta  (5Y Monthly)  0.70 0.64
P/E Ratio  21.44 39.24
EPS (TTM) – 0.12 – 0.14
Dividend Frequency  Monthly Quarterly 
Dividend Yield  3.82% 3.00%

Since the stock price is not currently depressed, Gladstone Land may not deliver increased yield to an investor who buys now. However, the company is positioned to provide steady and reliable dividend payouts throughout this time.

Investors can have peace of mind that the dividend they receive from Gladstone Land will not be suspended, despite the current economic turmoil. To learn about other monthly dividend stock suggestions, read the following article: 6 Best Monthly Dividend Stocks to Buy Now.

 

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Olivia Faucher is an editorial intern with Eagle Financial Publications.

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