Despite the solid real GDP growth of 2.8% in the second quarter, compared to an only 1.4% growth in the first quarter of 2024, the U.S. economy continues to grapple with slow growth rate due to lower consumer spending and uncertain geopolitical conditions.
So, investors seeking monthly dividends could consider sound dividend REITs Realty Income Corporation (O), STAG Industrial, Inc. (STAG), and EPR Properties (EPR) for a stable income stream.
Despite easing inflation, the U.S. economy continues to be on the fences in terms of growth. Owing to rising prices and elevated interest rates sap domestic demand, the economy is projected to lose momentum in the second half of 2024. Its real GDP growth of 2.8% quarterly annualized in second quarter of 2024, fueled by stronger domestic demand and a growth in inventories.
However, certain signs of weakness continue to linger, such as lower consumer spending on services. Also, there are chances that consumers and businesses are likely to carry on with cutting spending and investments ahead, bringing economic growth decelerated to 0.6% annualized in third quarter of 2024.
Further, the recent inflation readings in the United States suggest that the highest price spike phase is eventually fading and may result in interest rate cuts by the Federal Reserve soon.
With these uncertain economic trends, investing in monthly dividend stocks appears promising for investors looking for regular income streams. Dividend stock companies are entities which pay returns to the shareholders regularly which usually increase as companies grow. These stocks offers multifaceted advantage through quarterly payouts and capital appreciation.
Further, investors can pick segment REITs like Retail REITs and Industrial REITs which own and manage retail real estate and industrial facilities and rent space in those properties to tenants. They invest in a variety of properties and yield high returns for the investors in the form of regular dividends as they are mandated to distribute at least 90% of their taxable income.
With that in mind, let’s dig deeper into the fundamentals of the above-mentioned dividend-paying stocks in detail:
Realty Income Corporation (O)
O is an S&P 500 company and member of the S&P 500 Dividend Aristocrats index. It invests in people and places to deliver dependable monthly dividends which increases over time. The company is structured as a REIT, and its monthly dividends are supported by the cash flow from over 15,450 real estate properties.
On August 15, O declared its 650th consecutive common stock monthly dividend. The dividend sum of $0.26 per share is payable on September 13, 2024 to stockholders of record as of September 3, 2024.
The company also declared a quarterly cash dividend of $0.37 per share to holders of its 6.00% Series A Cumulative Redeemable Preferred Stock. The dividend is payable on September 30, 2024, to preferred stockholders of record as of September 13, 2024.
O’s annual dividend of $3.16 translates to a yield of 5.19% at the current share price. Its four-year average dividend yield is 4.74%. Moreover, the company’s dividend payouts have increased at a CAGR of 4.3% over the past three years. Realty has raised its dividends for 26 consecutive years.
During the second quarter that ended June 30, 2024, O’s total revenue increased 31.4% year-over-year to $1.34 billion. Net income available to common stockholders of $256.80 million, reflects growth of 31.4% year-over-year and its net income per share was $0.29.
In addition, adjusted funds from operations available to common stockholders came in at $921.07 million and $1.06 per share, up 37.1% and 6% from the prior year’s quarter, respectively.
According to the revised 2024 guidance, O expects net income per share between $1.21 and $1.30. Its AFFO per share is expected to range from $4.15 to $4.21.
Analysts expect O’s revenue and EPS for the third quarter (ending September 2024) to increase 23.9% and 2.7% year-over-year to $1.25 billion and $1.07, respectively. Further, the company has surpassed the consensus revenue estimates in each trailing four quarter, which is impressive.
Over the past six months, O’s stock has gained 15.4% and 7.7% over the past year to close the last trading session at $60.56.
O’s bright outlook is reflected in its POWR Ratings. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
The stock has a B grade for Momentum. Within the REITs – Retail industry, O is ranked #21 out of 30 stocks.
Click here to access additional ratings of O (Value, Quality, Sentiment, Stability, and Growth).
STAG Industrial, Inc. (STAG)
STAG is a REIT focused on the acquisition, ownership, and operation of industrial properties. The company’s platform is designed to identify properties for acquisition, provide growth through sophisticated industrial operation and an attractive opportunity set, and capitalize its business appropriately given the characteristics of the assets.
On July 10, STAG’s Board of Directors maintained the monthly common stock dividend at $0.12 per share and declared the following third quarter common stock dividends: July 2024 - paid on August 15, 2024 to holders of record as of July 31, 2024, August 2024 – to be paid on September 16, 2024, to holders of record as of August 30, 2024.
Also, September 2024 dividend of $0.12 per share will be paid on October 15, 2024, to holders of record as of September 30, 2024.
STAG pays an annual dividend of $1.48, which translates to a yield of 3.73% at the current share price. Its four-year average dividend yield is 4.13%. Moreover, the company’s dividend payouts have increased at a CAGR of 0.7% over the past three years. STAG has raised its dividends for 11 consecutive years.
For the second quarter that ended June 30, 2024, STAG’s total revenue increased 10.5% year-over-year to $189.78 million. Its net operating income grew 9.5% year-over-year to $152.30 million. Net income attributable to common stockholders came in at $59.74 million and $0.33 per share, up 15.9% and 13.8% from the prior year’s quarter, respectively.
Additionally, the company’s core funds from operations of $113.15 million or $0.61 per share, indicates increases of 9.3% and 8.9% year-over-year. Its adjusted EBITDAre increased 10.6% from the year-ago value to $138.73 million.
Analysts expect STAG’s revenue for the third quarter (ending September 2024) to increase 5.6% year-over-year to $189.31 million, and its FFO is expected to grow 1.2% year-over-year to $0.60 for the same quarter. Moreover, the company topped the consensus revenue and EPS estimates in each of the trailing four quarters.
The stock has surged 2.2% over the past six months and 13.1% over the past year to close the last trading session at $39.54.
STAG’s POWR Ratings reflect its bright prospects. STAG has a B grade for Momentum, and Stability. It is ranked #9 among 18 stocks within the REITs - Industrial industry.
To see the other ratings of STAG for Quality, Value, Sentiment, and Growth, click here.
EPR Properties (EPR)
EPR is a leading diversified experiential net lease REIT specializing in select enduring experiential properties in the real estate industry. The company focusses on real estate venues which create value by facilitating out of home leisure and recreation experiences.
On August 16, EPR’s Board of Trustees declared its monthly cash dividend to common shareholders. The dividend of $0.28 per common share to be paid on September 16, 2024 to shareholders of record on August 30, 2024.
EPR pays an annual dividend of $3.42, which translates to a yield of 7.50% at the current share price. Its four-year average dividend yield is 5.81%. Also, the company’s dividend payouts have increased at a CAGR of 137.5% over the past three years.
During the second quarter that ended June 30, 2024, EPR’s total revenue increased marginally year-over-year to $173.09 million. Its net income available to common shareholders came in at $39.06 million or $0.51 per common share, reflecting increases of 416.7% and 410% year-over-year, respectively.
In addition, the company’s adjusted funds from operations came in at $92.29 million and $1.20 per common share, respectively.
As per the company’s updated 2024 guidance, EPR expects AFFO per common share to range between $4.76 and $4.96.
Street expects EPR’s FFO for the fourth quarter (ending December 2024) to increase 5.4% year-over-year to $1.24 and its revenue is expected to be $162.33 million for the same quarter. Furthermore, the company has surpassed the consensus revenue estimates in all of the trailing four quarters.
Shares of EPR have gained 6.7% over the past six months and 5.4% over the past year to close the last trading session at $45.35.
EPR’s sound fundamentals are reflected in its POWR Ratings. EPR has a B grade for Quality and Momentum. It is ranked #4 among 30 stocks in the REITs - Retail industry.
In addition to the POWR Ratings we’ve stated above, we also have EPR’s ratings for Value, Growth, Sentiment, and Stability. Get all EPR ratings here.
What To Do Next?
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O shares were trading at $60.34 per share on Wednesday afternoon, down $0.22 (-0.36%). Year-to-date, O has gained 8.69%, versus a 18.44% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
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