So, here at Millionacres, we like to start off the month with several what you might call “standing features” -- media jargon for the same idea or topic with updated content.
For the past few months, I’ve written about monthly dividend real estate investment trusts (REITs) to buy, and while that’s a subset of maybe a dozen real estate stocks, there’s still some variety in there. So, instead of revisiting the best-known REITs here like STAG Industrial, SL Green, and the granddaddy of them all, Realty Income, I thought I’d branch out a bit and highlight three monthly dividend stocks that provide their own reasons for consideration for an October buy.
Agree Realty (NYSE: ADC) is a retail REIT that focuses on net lease arrangements with a diverse list of tenants in a portfolio of 1,262 owned and operated properties, with 26 million square feet of leasable space in 46 states across the U.S.
Suburban Detroit-based Agree began paying dividends monthly this year, first at $0.207 per share through March and then $0.217 per share through October. That was after steadily raising its quarterly dividend since 2013, even through the worst months of 2020.
Agree shares closed at $66.95 on Sept. 28, compared with a 52-week high of $75.95 reached on Aug. 1 and a 52-week low of $61.27 on March 4. That was good for a market cap of $4.6 billion and a yield of 3.87% based on an annual dividend of $2.60 per share.
Orchid Island Capital
So, here’s a Florida-based operation operated by Bimini Advisors that says it will pay you about 15% a year for your money, which it will then invest in packaged securities in the volatile residential housing market.
That might cause you to roll your eyes, but the thing is that Orchid Island Capital (NYSE: ORC) is a perfectly legitimate mortgage REIT (mREIT) that trades on the New York Stock Exchange and has been paying dividends every month since March 2013.
And at a pretty fair rate. Like many of its competitors, Orchid Island specializes in risk-based mortgage securities (RMBS) from Fannie Mae, Freddie Mac, and Ginnie Mae.
They typically have higher yields than property-owning REITs, and Orchid Island’s yield looks even higher than normal because of its relatively low stock price. Keep an eye out here for the impulse to chase yield, and be ready to bail out if you think interest rates and/or the housing market are heading north or south, respectively.
Orchid Island shares closed at $5.00 on Sept. 28, compared with a 52-week high of $6.22 reached on April 14 and a 52-week low of $4.80 from Aug. 4. That was good for a market cap of $679 million and a yield of 15.57% based on an annual dividend of $0.78 per share.
Whitestone REIT (NYSE: WSR) is a retail REIT with a 2Q21 portfolio of 59 properties occupied by 1,440 tenants primarily in the fast-growing Phoenix and Austin, Dallas-Fort Worth, Houston, and San Antonio, Texas, markets. It’s paid shareholder dividends every month since its IPO in 2010.
Whitestone REIT did cut its dividend last year, and there are reasons to proceed cautiously here, but the company is confident in its own prospects -- touting, for instance, its purchase of several more properties in the Dallas area and the recovery it’s seeing in foot traffic and leasing activity of late.Whitestone shares closed at $9.85 on Sept. 28, compared with a 52-week high of $10.43 reached on March 15 and a 52-week low of $5.87 from last Oct. 29. That was good for a market cap of $456.2 million and a yield of 4.30% based on an annual dividend of $0.43 per share.
The Millionacres bottom line
There are no sure things in real estate investing, but there are some rules. One of them is that REITs have to pay at least 90% of their taxable income to investors in the form of dividends. When they do it monthly, that can feel four times as nice as getting paid quarterly. Companies that can do that consistently and reliably are worth looking at, especially for income investors, and Agree Realty, Orchid Island, and Whitestone do merit some consideration in that regard.