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Best REITs Paying Monthly Dividends

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by Gavin in Blog
September 6, 2020 0 comments

Contents

A REIT (Real Estate Investment Trust) is a special company that pools together the capital of investors to purchase, operate, or finance real estate that generates income.

A REIT provides several advantages for an investor.

Firstly, a REIT is a great way for investors to earn a dividend from investing in real estate without having to buy, finance, or manage a property themselves.

Secondly, a REIT gives an investor diversification, as a REIT portfolio can include many types of properties ranging from apartment complexes, hotels, and data centers, through to office buildings, warehouses, and even cell towers and energy pipelines.

Thirdly, unlike a physical real estate investment, REITs are highly liquid as they are publicly traded like stocks on major security exchanges.

The disadvantage for investors is that REITs don’t offer much in the way of capital appreciation, so they’re used primarily for dividends only.

Due to regulations, for a REIT to maintain its tax-free status it is required to distribute more than 90% of its earnings each year.

This means that for investors, they can buy a REIT and enjoy high dividend payments with a consistent dividend policy.

Being exchange-traded, there are times when prices can get out of line with fundamentals, presenting buying opportunities.

Savvy investors who have stuck with REITs through the various market gyrations over the years have enjoyed an average 13% annual return as measured by the MSCI U.S. REIT Index.

The Best Monthly Paying REITs

Most REITs distribute dividends every quarter, however a few distribute monthly as well.

This can be an advantage for investors as more frequent payouts mean more opportunity to reinvest and start compounding earlier.

Here are some of the best REITs that distribute dividends monthly.

American Capital Agency Corporation (AGNC)

AGNC is managed by American Capital Ltd and primarily invests in mortgage-backed securities and collateralized mortgage obligations that are guaranteed by a government-sponsored agency.

It also maintains some investments in residential and commercial mortgage-backed securities however these are not guaranteed by a government-sponsored agency.

The nature of the assets AGNC holds means that its debt is highly sensitive to changes in interest rates, although this is offset somewhat by interest rate hedges.

As of September 2020, it has a dividend of $1.44, representing a dividend yield of 10.28%.

Apple Hospitality (APLE)

APLE is one of the largest hospitality sector-focused REITs, owning a substantial number of upscale hotels (particularly Marriott and Hilton branded hotels) in both developed and developing markets.

APLE has a history of delivering high customer satisfaction through the consistent reinvestment of much of its cash flows back into the portfolio.

As of September 2020, it has a dividend of $1.20, representing a dividend yield of 12.00%.

Bluerock Residential Growth (BRG)

BRG specializes in multifamily residential communities in U.S. growth markets.

As a small-cap trust, it often partners with regional property owners to continually add apartment buildings to its portfolio.

As of September 2020, it has a dividend of $0.65, representing a dividend yield of 8.99%.

EPR Properties (EPR)

EPR is a small-cap trust that specializes in niche real estate, with a portfolio spanning theme parks, casinos, public charter schools, and wineries.

Properties are rented using triple net leases, so tenants bear any operational, maintenance, insurance, and tax costs.

As of September 2020, it has a dividend of $4.59, representing a dividend yield of 14.64%.

LTC Properties (LTC)

LTC is another specialist REIT, with a niche-focused on housing for seniors and long-term care facilities.

With a portfolio of 200 properties across 28 states, it has broad exposure to the aged care housing sector.

LTC uses triple net leases and earns additional income by investing in mortgage loans.

As of September 2020, it has a dividend of $2.28, representing a dividend yield of 6.31%

Stag Industrial (STAG)

For investors looking for exposure to the industrial sector, STAG provides a great option.

STAG invests in distribution centers and warehouses, with 370 properties across 37 states.

The nature of its niche means that it can lease buildings to single tenants, avoiding the sort of turnover multi-tenant properties suffer from.

STAG enjoys a 70% tenant retention rate and as of September 2020, it has a dividend of $1.44, representing a dividend yield of 4.41%.

Canadian REITS That Pay Monthly Dividends

The U.S. isn’t the only country with REITs that pay monthly – here are some of the best from Canada.

RioCan 

With hundreds of retail properties across Canada, RioCan is the second-largest REIT in Canada.

It has an impressive enterprise value of $14 billion, investing primarily in supermarkets and shopping centers.

As of September 2020, it has a dividend of $1.44, representing a dividend yield of 9.30%.

SmartCentres

Similar to RioCan, SmartCentres focuses on retail properties and boasts Walmart as a lead tenant across almost all of its malls.

In recent years it has begun diversifying into urban and mixed-use properties, but shopping centers still make up the bulk of its portfolio.

As of September 2020, it has a dividend of $1.85, representing a dividend yield of 8.97%.

Canadian Apartment Properties 

Canadian Apartment Properties focuses on multi-unit residential rental properties in and around urban centers.

It also has some exposure to the Netherlands and Ireland, with a total of 65,000 suites across all three countries.

As of September 2020, it has a dividend of $1.38, representing a dividend yield of 2.90%.

H&R

H&R is the third-largest REIT in Canada with a total value of $13 billion.

H&R holds a diversified range of properties, half of which are office properties, 40% in retail, and the remainder split across industrial and residential sites.

Two-thirds of its assets are Canadian with the remaining being located in America.

As of September 2020, it has a dividend of $0.69, with a total value of 6.71%.

Trade safe!
Gav.

Disclaimer: The information above is for educational purposes only and should not be treated as investment advice. The strategy presented would not be suitable for investors who are not familiar with exchange traded options. Any readers interested in this strategy should do their own research and seek advice from a licensed financial adviser.

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