Real estate investment trusts (REITs) can be seen as plain vanilla stocks compared with the latest go-go issues of the day -- or decade -- but they do provide a certain comfort in the form of dividend payouts.
Or at least they should. After all, as the SEC says, “To qualify as a REIT, a company must have the bulk of its assets and income connected to real estate investment and must distribute at least 90% of its taxable income to shareholders annually in the form of dividends.”
Of course, the pandemic wreaked havoc on many a REIT’s portfolio, prompting dividend cuts and suspensions among more than a few, but with recovery underway, now’s a good time and June is a good month to consider showing them some investment love.
Most REITs pay dividends quarterly, but there are some that pay monthly, making them even more attractive to folks dependent on monthly income, or who just like it better that way. Here are three to consider, each from a different real estate investment segment.
SL Green Realty
SL Green Realty (NYSE: SLG) is the largest office landlord in Manhattan and says it expects most of its tenants to return to the office over the summer.
This office REIT says that as of March 31, it had a portfolio of 84 buildings totaling 37.8 million square feet, including ownership interests in 28.3 million square feet of Manhattan buildings and 8.7 million square feet securing debt and preferred equity investments.
SL Green switched from quarterly to monthly dividends in March 2020, beginning with a payout of $0.295 that it has since raised to $0.3033 for the past six months.
SL Green stock was yielding 4.59%, based on a May 28 closing price of $79.22 per share, just below the 52-week high of $79.85 per share reached earlier that day and nearly double what the stock sold for at its 52-week low of $40.49 from last Oct. 28.
A $10,000 investment at that closing price of $79.22 per share would get you 126.23 shares. Multiply that by the current monthly dividend of $0.3033, and you get a monthly payout of $38.29, regardless of share price fluctuation and until that monthly dividend changes.
STAG Industrial (NYSE: STAG) is a Boston-based industrial REIT that acquires and operates single-tenant properties across the United States. The company’s diversified portfolio currently contains 494 buildings in 39 states, covering 99.1 million square feet that as of the first quarter was 97% occupied. STAG says its tenants are from more than 60 different markets, and the largest tenant represents only 4% of its rental income.
Stag declared on April 12 that will pay $0.120833 per share in dividends through July. The company has grown its dividend by an average of 0.82% in each of the past seven years.
STAG stock was yielding 4.06%, based on a May 28 closing price of $35.71 per share. That’s 3.90% below the company’s 52-week high of $37.16 per share from May 10. Its 52-week low was $26.44 on June 11, 2020.
So, a $10,000 investment at that closing price of $35.71 per share would get you 280.03 shares. Multiply that by the current monthly dividend of $0.121, and you get a monthly payout of $33.88.
Whitestone REIT (NYSE: WSR) is a Houston-based owner, operator, and developer of high-quality neighborhood shopping centers primarily in the largest, fastest-growing, and most affluent markets in the Sun Belt.According to its first-quarter shareholder presentation, Whitestone’s portfolio contains 58 properties with 5 million square feet of leasable space that’s 89.1% occupied. The company currently is in the Texas markets of Houston, Austin, Dallas, Fort Worth, and San Antonio and Arizona’s Phoenix, Scottsdale, Mesa, Gilbert, and Chandler markets. It has plans to potentially expand into Florida, Georgia, North Carolina, Tennessee, and Colorado.
This retail REIT has paid dividends for 128 consecutive months, including $0.0358 per month in April, May, and June, a very slight increase from the $0.0350 it had paid for 12 months after cutting the payout from the $0.0950 per share it had been paying monthly since 2010.
That smaller payout was still good enough for a respectable yield of 5.19%, based on a May 28 closing price of $8.28 per share. That’s 20.61% below the company’s 52-week high of $10.43 per share from March 15 and well above its 52-week low of $5.62 per share from last Sept. 24.
So, a $10,000 investment at that closing price of $8.28 per share would get you 1,207.7 shares. Multiply that by the current monthly dividend of $0.0358 per share, and you get a monthly payout of $43.24.
The Millionacres bottom line
So, the monthly payouts for a $10,000 ante in each of these three stocks range from $33.88 to $43.24. Put that $10,000 in a typical money market account yielding 0.01% instead, and you can expect on average about $0.083. Yep, that’s 8.3 cents.
So, while there’s certainly volatility involved, picking out some solid-performing monthly REITs can help bolster the portfolio payout while adding diversity as well.