Monthly Dividend Stock In Focus: AGNC Investment Corp.


Updated on March 31st, 2025 by Felix Martinez

AGNC Investment Corp (AGNC) has an extremely high dividend yield of above 15.1%. In terms of current dividend yield, AGNC is near the very top of our list of high-yield dividend stocks.

In addition, AGNC pays its dividend each month rather than quarterly or semi-annually. Monthly dividends allow investors to compound dividends even faster.

There are 76 monthly dividend stocks in our database. You can download our full Excel spreadsheet of all monthly dividend stocks (along with metrics that matter like dividend yields and payout ratios) by clicking on the link below:

 

That said, investors should also assess the sustainability of such a high dividend yield, as yields in excess of 10% are often a sign of fundamental business challenges. Double-digit dividend yields often signal that investors do not believe the dividend is sustainable and are pricing the stock in anticipation of a cut to the dividend.

This article will discuss AGNC’s business model and whether the stock appeals to income-oriented investors.

Business Overview

AGNC was founded in 2008 and is an internally managed REIT. Unlike most REITs, which own physical properties that are leased to tenants, AGNC has a different business model. It operates in a niche of the REIT market: mortgage securities.

AGNC invests in agency mortgage-backed securities. It generates income by collecting interest on its invested assets, minus borrowing costs. It also records gains or losses from its investments and hedging practices.

Agency securities have principal and interest payments guaranteed by either a government-sponsored entity or the government itself. They theoretically carry less risk than private mortgages.

Source: Investor Presentation

The trust employs significant amounts of leverage to invest in these securities, boosting its ability to generate interest income. AGNC borrows primarily on a collateralized basis through securities structured as repurchase agreements.

The trust’s goal is to build value via monthly dividends and net asset value accretion. AGNC has done well with its dividends over time, but net asset value creation has sometimes proven elusive.

Indeed, the trust has paid over $48 of total dividends per share since its IPO; the share price today is just over $9.40. That sort of track record is extraordinary and is why some investors are drawn to the stock.

In other words, the trust has distributed cash per-share to shareholders of nearly five times the stock’s current value.

AGNC reported its Q4 2024 results on January 27th, 2025. The company reported a comprehensive loss of $0.11 per share, including $0.10 net income and $(0.20) in other comprehensive loss. Net spread and dollar roll income totaled $0.37 per share. Tangible net book value fell 4.6% to $8.41, while $0.36 per dividend share was declared. The economic return on tangible equity was -0.6% for the quarter.

AGNC’s $73.3B portfolio included $65.5B in Agency MBS and $6.9B in TBA securities. Leverage remained 7.2x, with $6.1B in unencumbered cash and MBS (66% of tangible equity). The company issued $511M in stock via ATM in Q4, totaling $2.0B for 2024. Full-year economic return reached 13.2%, with $1.44 in dividends per share.

Management expects a strong 2025 as the Fed eases policy. CEO Peter Federico highlighted stable MBS spreads and attractive returns, while CFO Bernice Bell noted $0.37 per share in spread income and $6.1B in liquidity, supporting continued shareholder returns.

Growth Prospects

The major drawback to mortgage REITs is that rising interest rates negatively impact the business model. AGNC makes money by borrowing at short-term rates, lending at long-term rates, and pocketing the difference. Mortgage REITs are also highly leveraged to amplify returns.

It is common for mortgage REITs to have leverage rates of 5x or more because spreads on these securities tend to be quite tight. AGNC currently has a leverage ratio of 7.2x.

In a rising interest-rate environment, mortgage REITs typically see the value of their investments reduced. Higher rates usually cause their interest margins to contract, as the payment received is fixed in most cases, whereas borrowing costs are variable.

Interest rates surged to 23-year highs last year as central banks around the world hiked rates aggressively to reduce inflation. The trust’s book value contracted in recent quarters as a result of these moves.

Overall, the high payout ratio and the volatile nature of the business model will harm earnings-per-share growth. We also believe that dividend growth will be anemic for the foreseeable future.

On the bright side, inflation has finally moderated in most developed countries, including the U.S. As a result, the Fed just began reducing interest rates and expects to reduce them much further, from 4.75%-5.0% to 2.75%-3.0% by 2026. If inflation does not rebound, the Fed will likely execute as per its guidance.

In that case, AGNC will enjoy a strong tailwind in its business, as its borrowing costs will decrease and its interest margins will expand.

Dividend Analysis

AGNC has declared monthly dividends of $0.12 per share since April 2020. This means that AGNC has an annualized payout of $1.44 per share, which equals an extremely high current yield of 15.1% based on the current share price.

Source: Investor Presentation

High yields can be a sign of elevated risk. AGNC’s dividend does carry significant risk. AGNC has reduced its dividend several times over the past decade.

We do not see a dividend cut as an imminent risk at this point, given that the payout was fairly recently cut to account for unfavorable interest rate movements and that AGNC’s net asset value appears to have stabilized.

Management has taken the necessary steps to protect its interest income, so we don’t see another dividend cut in the near term, particularly given that the Fed’s expected interest rate reductions over the next three years will provide a tailwind to AGNC.

In fact, the payout ratio remains below 90% of earnings for the foreseeable future. If this proves correct, there will be no reason to cut the payout.

However, with any mortgage REIT, there is always a significant risk to the payout, and investors should keep that in mind, particularly given the volatile behavior of interest rates in recent years.

Final Thoughts

High-yield monthly dividend-paying stocks are extremely attractive for income investors, at least on the surface. This is particularly true in an environment of low interest rates, as alternative sources of income generally have much lower yields. AGNC pays a hefty yield of 15.1% right now, which is very high by any standard.

We believe the REIT’s high yield is safe for the foreseeable future, but given the company’s business model and interest-rate sensitivity, this is hardly a low-risk situation.

While AGNC should continue to pay a dividend yield many times higher than the S&P 500 Index average, it is not an attractive option for risk-averse income investors.

Don’t miss the resources below for more monthly dividend stock investing research.

And see the resources below for more compelling investment ideas for dividend growth stocks and/or high-yield investment securities.

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Monthly Dividend Stock In Focus: Atrium Mortgage Investment Corporation


Updated on March 31st, 2025 by Felix Martinez

Atrium Mortgage Investment Corporation (AMIVF) has two appealing investment characteristics:

#1: It is a high-yield stock based on its  10.1% dividend yield.
Related: List of 5%+ yielding stocks.
#2: It pays dividends monthly instead of quarterly.
Related: List of monthly dividend stocks

You can download our full Excel spreadsheet of all 76 monthly dividend stocks (along with metrics that matter, like dividend yield and payout ratio) by clicking on the link below:

 

Combining a high dividend yield and a monthly dividend could make Atrium Mortgage Investment Corporation appealing to income-oriented investors. In addition, the company is the leading non-bank lender in Canada, and thus, it has a reliable business model. In this article, we will discuss Atrium Mortgage Investment Corporation’s prospects.

Business Overview

Atrium Mortgage Investment Corporation is a non-bank lender that provides residential and commercial mortgage services in Canada. The company offers various types of mortgage loans, such as land and development financing, construction and mezzanine financing, and commercial term and bridge financing services for residential, multi-residential, and commercial real estate properties. Atrium Mortgage Investment Corporation was founded in 2001 and is headquartered in Toronto, Canada.

Atrium Mortgage Investment Corporation invests in commercial and residential mortgages from customers who cannot borrow funds from traditional banking channels. To reduce its risk, the company has a diversified mortgage portfolio and does its best to maintain a disciplined underwriting policy.

A typical loan in the company’s portfolio has an interest rate of 6.99%- 12.99%, a duration of 1-2 years, and monthly mortgage payments. Atrium Mortgage Investment Corporation’s mortgage portfolio currently has a weighted average interest rate of 10.93%, consisting of 88% residential and 12% commercial mortgages.

Source: Investor Presentation

The company tries to reduce operating expenses and provide stable dividends to its shareholders with minimum volatility. To this end, it maintains a high-quality mortgage portfolio characterized by a conservative underwriting policy.

Thanks to its prudent management, Atrium Mortgage Investment Corporation has offered consistent returns to its shareholders over the last decade. During this period, the company’s return on equity has steadily remained 600-800 basis points above the yield of the Canadian government’s 5-year bond.

Thanks to its solid business model, Atrium Mortgage Investment Corporation has proved extremely resilient throughout the coronavirus crisis. This is impressive, as the pandemic would normally be expected to affect the company’s borrowers, who cannot borrow funds from large financial institutions. The resilience of Atrium Mortgage Investment Corporation to the pandemic is a testament to the strength of the company’s business model.

The company reported strong 2024 financial results, with a net income of $47.9 million and earnings per share of $1.06 (basic) and $1.05 (diluted), despite this being a 7.1% decline from 2023. The company maintained a high-quality mortgage portfolio, with 96.7% in first mortgages and an average loan-to-value ratio of 61.9%. A special dividend of $0.16 per share was declared, payable on March 19, 2025, bringing the total dividend for the year to $1.0625 per share.

Atrium reduced Stage 2 and 3 loans from $129.7 million in Q3 to $79 million in Q4 while expanding its credit facility by $25 million to $340 million and raising $28.8 million through an oversubscribed equity offering. Revenues declined 1.3% to $97.3 million, and total assets fell slightly to $864.3 million. The mortgage portfolio ended the year at $863.2 million, down from $876.7 million due to higher repayments.

With a weighted average interest rate of 9.98% and strategic shifts toward lower-risk lending, Atrium remains well-positioned for 2025. The company anticipates reduced competition from non-bank lenders and increased funding capacity to support growth. Following an OSC review, Atrium restated its 2023 cash flow statement without impacting overall financials.

Growth Prospects

Atrium Mortgage Investment Corporation has performed remarkably over the last nine years. Management’s focus on minimizing operating expenses and providing stable returns to shareholders has certainly paid off.

On the other hand, the company has posted essentially flat earnings per share over the last nine years. Therefore, investors should not expect meaningful earnings growth going forward. In other words, Atrium Mortgage Investment Corporation’s reliable performance comes at a price: lackluster growth prospects.

Given Atrium Mortgage Investment Corporation’s rock-solid business model and lackluster performance record, we expect approximately flat earnings per share five years from now.

Dividend & Valuation Analysis

Atrium Mortgage Investment Corporation is currently offering an exceptionally high dividend yield of 10.1%, many times the 1.3% yield of the S&P 500. The stock is thus an interesting candidate for income-oriented investors, but U.S. investors should be aware that the dividend they receive is affected by the prevailing exchange rate between the Canadian dollar and the USD.

Atrium Mortgage Investment Corporation has an elevated payout ratio of over 100%. However, it is in a strong financial position, with its interest expense currently consuming slightly less than 25% of its total interest and dividend income. As a result, the company is not likely to cut its dividend significantly anytime soon.

It is also remarkable that Atrium Mortgage Investment Corporation has maintained a solid dividend record over the last decade.

Source: Investor Presentation

Overall, shareholders should rest assured that Atrium Mortgage Investment Corporation’s base dividend is safe, and the company will likely continue paying a special dividend year after year.

On the other hand, the company has hardly grown its dividend in USD over the last ten years due to the depreciation of the Canadian dollar versus the USD. Given the low single-digit growth rate of the dividend in Canadian dollars, it is prudent for U.S. investors to expect minimum dividend growth going forward.

In reference to the valuation, Atrium Mortgage Investment Corporation has been trading for 10.2 times its earnings per share for the last 12 months. Given the company’s resilient business model and lackluster growth prospects, we assume a fair price-to-earnings ratio of 12.0 for the stock. Therefore, the current earnings multiple is slightly lower than our assumed fair price-to-earnings ratio. If the stock trades at its fair valuation level in five years, it will enjoy a 1.9% annualized return gain.

Taking into account the flat earnings per share, the 10.1% dividend yield, and a 1.9% annualized expansion of valuation level, Atrium Mortgage Investment Corporation could offer a 12% average annual total return over the next five years. This is a good expected total return, but we recommend waiting for a lower entry point in order to enhance the margin of safety and increase the expected return from the stock.

Final Thoughts

Atrium Mortgage Investment Corporation is characterized by prudent management and a defensive business model. In addition, the stock is offering an exceptionally high dividend yield of 10.1%. The company has an elevated payout ratio of 100% but a strong balance sheet and a consistent dividend record. As a result, its dividend should be considered safe, though investors should not expect meaningful dividend growth anytime soon. Overall, the stock seems undervalued right now.

Moreover, Atrium Mortgage Investment Corporation is characterized by extremely low trading volume. This means that it may be hard to establish or sell a large position in this stock.

Don’t miss the resources below for more monthly dividend stock investing research.

And see the resources below for more compelling investment ideas for dividend growth stocks and/or high-yield investment securities.

Thanks for reading this article. Please send any feedback, corrections, or questions to [email protected].





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Monthly Dividend Stock In Focus: Phillips Edison & Company


Updated on April 2nd, 2025 by Nathan Parsh

Monthly dividend stocks distribute their dividends on a monthly basis, providing a smoother income stream to their shareholders.

In addition, many of these companies are shareholder-friendly, i.e., they do their best to maximize their distributions to their shareholders.

As a result, many of these stocks are great candidates for income investors’ portfolios.

You can download our full Excel spreadsheet of all monthly dividend stocks (along with metrics that matter, like dividend yields and payout ratios) by clicking on the link below:

 

In this article, we will analyze the prospects of Phillips Edison & Company (PECO), a relatively new monthly dividend stock in the public markets.

Business Overview

Phillips Edison & Company is an experienced owner and operator exclusively focused on grocery-anchored neighborhood shopping centers. It is a Real Estate Investment Trust (REIT) with an interest in 316 shopping centers, including 294 wholly-owned centers and 22 centers owned through three unconsolidated joint ventures. This portfolio comprises nearly 36 million square feet spread across 31 U.S. states.

Phillips Edison has a 30-year history, but it began trading publicly only in the summer of 2021. Its management owns 8% of the company, and its interests align with the shareholders.

Shopping centers are experiencing a secular decline due to the shift of consumers from brick-and-mortar shopping to online purchases, which has accelerated during the COVID-19 pandemic.

However, Phillips Edison is well-protected from this trend. It generates ~70% of its rental income from retailers that provide necessity-based goods and services and has minimal exposure to distressed retailers.

The strong foot traffic is a testament to the strength of the REIT’s business model, which also enables the trust to increase its rents on a regular basis.

Source: Investor Presentation

On February 6th, 2025, Phillips Edison & Company released its Q4 results for the period ending December 31st, 2024. For the quarter, total revenues were $173 million, 2.1% higher year over year.

Same-store NOI rose by 16.5% to $110.4 million, and new and renewal leasing spreads landed at 30.2% and 20.8%, respectively, while the occupancy rate was strong at 97.7% – all of which were encouraging.

Despite slightly higher interest and operating expenses, Nareit’s FFO for the quarter grew by 12% to $83.8 million. Nareit FFO per share was $0.61, up from $0.56 last year. For the year, Nareit FFO totaled $2.37, compared to $2.25 in 2023.

During the quarter, the company acquired five shopping centers for a total of $94.6 million.

For fiscal 2025, management expects Nareit FFO per share to be between $2.47 and $2.54. This implies a 5.9% year-over-year growth at the midpoint.

Growth Prospects

As Phillips Edison became public only recently, it has a very short performance record, and it is somewhat challenging to forecast its future growth with any degree of precision.

On the other hand, REIT has several growth drivers in place.

First, it pursues growth by raising its rent regularly. Rent hikes are included in its leases, and the trust raises its rents faster when it leases a property to a new tenant.

It also pursues growth by redeveloping its properties when the returns are attractive.

As Phillips Edison currently owns less than 300 properties, it obviously has immense growth potential, though it will have to issue plenty of new units to fund its acquisitions.

Overall, Phillips Edison has several growth drivers in place and ample room for future growth, but it is prudent to keep somewhat conservative expectations due to the trust’s short performance record.

Based on the company’s historical leasing margins, same store NOI growth, and portfolio composition, we forecast FFO/share growth of 3% through 2030.

Competitive Advantages & Recession Performance

Phillips Edison’s competitive advantage lies in its focus on retailers that provide necessity-based goods and services. This focus renders the REIT more resilient to the secular decline of shopping centers than other retail-focused REITs and more resilient to recessions than most of its peers.

On the other hand, Phillips Edison performed its IPO only a few years ago, so it has not been tested during a recession. Therefore, its defensive business model has yet to be tested.

Dividend Analysis

Phillips Edison pays its dividends monthly and currently offers a 3.3% dividend yield. The trust’s expected payout ratio is 49% for 2025. It has an investment-grade balance sheet and a BBB credit rating from S&P.

Moreover, it has well-laddered debt maturities and no material debt maturities for the next two years. Furthermore, most of its total debt has a fixed rate, which is paramount in the current environment of rising interest rates. Therefore, the dividend should be considered safe for the foreseeable future.

As a side note, while Phillips Edison has an investment-grade balance sheet, its leverage ratio (Net Debt to EBITDA) currently stands at 5.0. This is at the very upper limit of our comfort zone (5.0) and reveals the eagerness of management to invest in the aggressive expansion of the trust.

Nevertheless, we believe that a lower leverage ratio is necessary to make the REIT more resilient to unexpected downturns.

Additionally, the 3.3% dividend yield of Phillips Edison is somewhat lower than the median dividend yield of the REIT sector. However, the ~50% payout ratio of the stock is lower than the median payout ratio of the REIT sector.

This means that Phillips Edison prefers to retain a greater portion of its earnings in order to invest more aggressively in its expansion. Overall, Phillips Edison’s dividend proposition is in line with the average stock of the REIT sector.

Final Thoughts

Monthly dividend stocks are attractive because they enhance the positive effect of compounding. However, some of these stocks are highly speculative, with high payout ratios and vulnerability to recessions.

Therefore, investors should perform their due diligence carefully before investing in this group of stocks.

Phillips Edison seems much better than a typical monthly dividend stock, as it has a healthy payout ratio and a fairly resilient business model. Nevertheless, its short history and somewhat leveraged balance sheet create some uncertainty.

Overall, we have fairly low total return expectations for PECO, but we see the appeal of the stock for its yield and monthly payouts.

Don’t miss the resources below for more monthly dividend stock investing research.

And see the resources below for more compelling investment ideas for dividend growth stocks and/or high-yield investment securities.

Thanks for reading this article. Please send any feedback, corrections, or questions to [email protected].





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Monthly Dividend Stock In Focus: Apple Hospitality REIT


Updated on March 31st, 2025 by Felix Martinez

Real Estate Investment Trusts, or REITs, are a core holding for many income investors due to their high dividend yields.

The coronavirus pandemic was devastating for many REITs. It especially hit the hospitality industry hard, including REITs in that industry.

Apple Hospitality REIT Inc. (APLE) is a REIT that pays a monthly dividend. Monthly dividend stocks pay shareholders 12 dividends per year instead of the more typical quarterly payments.

We created a list of all 76 monthly dividend stocks (along with important financial metrics such as dividend yields and payout ratios). You can download the spreadsheet by clicking on the link below:

 

Apple Hospitality has a 7.9% dividend yield, which is high. The high current yield and monthly dividend payouts make APLE an appealing stock for income investors.

This article will discuss this REIT in greater detail.

Business Overview

Apple Hospitality owns one of the largest and most diverse portfolios of upscale, rooms-focused hotels in the United States.

As of February 24th, 2025, Apple Hospitality owned 220 hotels with 29,688 guest rooms in 37 states and the District of Columbia.

APLE’s hotel portfolio consists of 100 Marriott-branded hotels, 119 Hilton-branded hotels and five Hyatt-branded hotels.

Source: Investor Presentation

On February 24th, 2025, APLE reported fourth-quarter results. The company reported strong Q4 and full-year 2024 results. Q4 net income rose 43.6% to $29.8M, while full-year net income increased 20.6% to $214.1M. Adjusted EBITDAre grew 6.7% in Q4 and 6.9% for the year. RevPAR improved 4.3% in Q4 to $107.65 and 2.5% annually to $115.34.

The company paid $1.01 per share in distributions (6.5% yield) and repurchased $35M in shares. It acquired two hotels for $196M and sold seven for $71.7M. Debt remained stable at $1.48B, with a 28.5% debt-to-cap ratio. CEO Justin Knight highlighted strong travel demand. Apple Hospitality owns 221 hotels with 29,764 rooms across 86 markets.

Growth Prospects

Since it first began reporting FFO/share in its annual reports (2011), Apple Hospitality initially generated very impressive annualized FFO/share growth thanks to its growing scale (due in large part to a merger in 2015), effective and efficient business model, and strong economic tailwinds in the United States during that period.

However, this growth rate has slowed dramatically recently, largely due to the Covid-19 outbreak and an accompanying downturn in the hotel industry that was further accelerated by the rise of companies like AirBnB.

Still, we expect growth to resume in the years ahead. Specifically, we forecast 1.0% compound annual growth of FFO-per-share over the next five years.

Apple Hospitality’s growth prospects will mostly come from an increase in rents. They were also selling less-profitable properties to acquire more beneficial properties.

Other growth drivers will come from long-term cost savings. The company has an expense reduction ratio target of 0.80 – 0.90. This is accomplished by increasing the cross-utilization of managers and associates.

Scaling to renegotiate vendor contracts and optimize labor management software that is already in place can also help reduce overall costs.

Lastly, stock buybacks will boost per-share FFO growth.

More locations and market diversification should help the company continue to grow its FFO for years to come. This will also allow the company to start increasing its dividends.

Source: Investor Presentation

Dividend Analysis

The company’s dividend history is not long, as it became public in 2015. The stock pays its dividend monthly, which is attractive to many income investors. In 2016, the company increased its annualized dividend substantially by 50%, from a $0.80 rate to a $1.20 rate.

However, in the following years, the dividend stayed at that same rate until 2020, when the COVID-19 pandemic forced the company to cut its dividend and freeze it to a $0.30 rate for the year.

The company resumed dividends in 2021. APLE currently pays a $0.08 monthly dividend, which equates to $0.96 per share annually.

The company’s healthy balance sheet helps support the dividend. APLE has some of the lowest debt-to-equity in the sector, plenty of liquidity, and a well-laddered debt maturity profile.

With an expected 2025 dividend payout ratio of approximately 61% in terms of FFO, we view the dividend as secure, although a steep recession would put the dividend at risk.

Apple does not have a recorded history as a public trust during a typical recession. Therefore, it is hard to judge its recession resilience, other than to compare it to hotel REITs.

Typically, during a recessionary period, hotel REITs experience significant income losses. Therefore, Apple is likely not very recession-resistant.

However, its concentration in strong brand names, excellent locations, strong balance sheet, franchising model, and emphasis on value should enable it to outperform its peers in a recession.

Final Thoughts

Apple Hospitality is one of the strongest players in the hotel sector due to its strong brand power, healthy balance sheet, and high-quality assets. The company has the potential to start increasing its dividends.

The dividend payout ratio is relatively low, and AFFO per share is expected to grow over the next five years. Overall, we think that it makes for an attractive buy right now.

Don’t miss the resources below for more monthly dividend stock investing research.

And see the resources below for more compelling investment ideas for dividend growth stocks and/or high-yield investment securities.

Thanks for reading this article. Please send any feedback, corrections, or questions to [email protected].





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Monthly Dividend Stock In Focus: Agree Realty


Updated on March 31st, 2025 by Felix Martinez

Real Estate Investment Trusts, or REITs for short, are a core holding for many income investors due to their high dividend yields.

At the same time, monthly dividend stocks are also appealing for income investors, due to their more frequent payout schedules.

Agree Realty (ADC) is a rarity among REITs, in that it pays a monthly dividend. Monthly dividend stocks pay shareholders 12 dividends per year instead of the more typical quarterly payments.

We created a list of 76 monthly dividend stocks (along with important financial metrics such as dividend yields and payout ratios). You can download the monthly dividend stocks spreadsheet by clicking on the link below:

 

Agree Realty’s dividend yield is 4.0%, more than three times the average yield of the S&P 500 Index.

Agree Realty offers a high level of dividend safety and the potential for dividend growth in the coming years. This article discusses ADC in greater detail.

Business Overview

Agree Realty is a retail Real Estate Investment Trust. Agree has developed over 40 community shopping centers throughout the Midwestern and Southeastern United States.

As of December 31, 2024, the property portfolio consisted of 2,370 properties located in 50 states and contained approximately 48.8 million square feet of gross leasable area.

At the end of the 2024 fourth quarter, Agree’s portfolio was 99.6% leased, and a weighted-average remaining lease term of approximately 7.9 years.

Just over two-thirds of annualized base rent comes from investment-grade retail tenants.

Its property portfolio is diversified and spans several industry groups, including grocery stores, home improvement retailers, auto service, and convenience stores.

Source: Investor Presentation

At the same time, Agree Realty has high-graded its portfolio by reducing its exposure to tenant groups most at risk from the current challenges, specifically the coronavirus pandemic.

For example, Agree Realty derives just 2% of its annual base rent from health clubs and fitness centers and just 1% of ABR from movie theaters. In all, Agree Realty generates two-thirds of its ABR from investment-grade tenants.

This portfolio quality is reflected in the company’s strong fundamentals. Agree Realty continues to post impressive results in a highly challenging period for many REITs, particularly those operating in the retail industry.

The company reported Q4 and full-year 2024 results, showing solid growth. In Q4, the company invested $371M in 127 properties, launched eight projects worth $45M, and increased AFFO per share by 4.7% to $1.04. It raised $651M through equity offerings and declared a $0.253 monthly dividend (up 2.4% YoY). Net income per share fell 5.7% to $0.41, while Core FFO rose 3.5% to $1.02.

For 2024, Agree Realty invested $951M in 282 properties and started 25 projects worth $115M. Net income per share grew 4.8% to $1.78, with AFFO up 4.6% to $4.14. The company issued $1.1B in forward equity, completed a $450M bond offering, and expanded its credit facility to $1.25B. Liquidity exceeded $2.0B, and its credit rating improved to BBB+. Dividends totaled $3.00 per share, up 2.8% YoY.

For 2025, the company projects AFFO per share between $4.26 and $4.30 and investments of $1.1B-$1.3B. Dispositions are expected at $10M-$50M, with expenses ranging from 5.6% to 5.9% of revenue. Monthly dividends for January and February 2025 were reaffirmed at $0.253 per share, continuing its steady shareholder returns.

Growth Prospects

Agree Realty has grown AFFO by a compound rate of 6.3% over the past ten years and by 5.9% per year over the past five years.

We expect that Agree Realty will continue to grow at a slightly slower pace of 4.0% annually for the next five years. Current growth prospects stem from the recent acquisitions announced for the year.

We see Agree Realty being able to grow AFFO through its three-pronged growth strategy revolving around acquisitions, development, and partner capital solutions.

During the fiscal year of 2024, Agree Realty invested $951 million in 282 retail net lease properties and committed over $115 million to 25 development projects.

Looking back further, it has invested over $9 billion in properties since 2010.

Source: Investor Presentation

Looking ahead, Agree Realty raised its 2025 AFFO per share guidance to $4.30 and increased its acquisition guidance to approximately $700 million.

We expect ADC to generate a 4.0% compound annual growth of FFO-per-share over the next five years.

Dividend Analysis

Prior to 2021, Agree Realty had paid a quarterly dividend like the vast majority of dividend stocks. But in 2021, the company switched to a monthly dividend schedule.

Agree Realty currently pays a monthly dividend of $0.253 per share. On an annual basis, the $3.04 dividend payout represents a 4.0% current yield.

Considering the S&P 500 Index currently yields just 1.3%, Agree Realty stock is an attractive option for income investors.

And, the company grows its dividend regularly. Agree Realty increased its dividend by approximately 5.5% per year in the past 10 years.

The dividend is also highly secure. Based on the expected AFFO of $4.30 for 2025, Agree Realty has a projected dividend payout ratio of 73% for the entire year.

Agree Realty’s payout ratio has remained highly consistent in the last decade, around the mid70s. This is a healthy payout ratio for a REIT, which must pay out the majority of its earnings to shareholders.

The company operates a healthy balance sheet with a net debt-to-equity ratio of 0.5x, well below many other REITs. Keeping a manageable level of debt is very important for REITs to keep the cost of capital down.

The company maintains investment-grade credit ratings of BBB+.

Final Thoughts

Real Estate Investment Trusts are popular for their high dividend yields, but extreme high-yielders should be avoided. Investors should not ignore REITs with somewhat lower yields, as these REITs often have superior fundamentals.

Agree Realty is an example of this; although its 4.0% yield trails many other REITs, it makes up for this with a high dividend safety and growth rate.

As a result, we view it as a solid pick for income investors, particularly those interested in dividend growth.

Don’t miss the resources below for more monthly dividend stock investing research.

And see the resources below for more compelling investment ideas for dividend growth stocks and/or high-yield investment securities.

Thanks for reading this article. Please send any feedback, corrections, or questions to [email protected].





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Watch These Johnson & Johnson Levels as Stock Plunges After Judge Rejects Talc Settlement



Key Takeaways

  • Johnson & Johnson shares tumbled Tuesday to lead S&P 500 decliners after the health care giant failed to reach a settlement in liability cases related to its baby powder and other talc products.
  • The stock recently ran into selling pressure near the upper trendline of a descending channel, with the price falling below both the 50- and 200-week moving averages in Tuesday’s trading session.
  • Investors should watch key support levels on Johnson & Johnson’s chart around $147 and $137, while also monitoring major resistance levels near $167 and $180.

Johnson & Johnson (JNJ) shares tumbled Tuesday after the health care giant failed to reach a settlement in liability cases related to its baby powder and other talc products.

The company said Tuesday that a judge denied its plan to settle thousands of legal claims alleging that its talc products cause ovarian cancer, adding that it will now return to the tort system to litigate and defeat the claims. The failed proposal involved using a “prepackaged bankruptcy plan” for a subsidiary, marking the third attempt the company has used the bankruptcy system in an effort to settle the claims.

Johnson & Johnson shares led S&P 500 decliners on Tuesday, falling 7.6% to close at $153.25. Despite today’s steep drop, Johnson & Johnson shares have gained 6% so far this year as of Tuesday’s close, handily outpacing the S&P 500’s 4% decline over the same period.

Below, we take a closer look at Johnson & Johnson’s weekly chart and use technical analysis to point out key price levels that investors may be watching.

Descending Channel in Focus

Since setting their record high in April 2022, Johnson & Johnson shares have traded lower within an orderly descending channel, tagging the pattern’s upper and lower trendlines on several occasions since that time.

More recently, the Dow component ran into selling pressure near the descending channel’s upper trendline, with the price falling below both the 50- and 200-week moving averages in Tuesday’s trading session.

Today’s drop also coincided with the relative strength index (RSI) plunging below the 50 threshold, signaling accelerating selling momentum.

Let’s identify key support and resistance levels on Johnson & Johnson’s chart worth watching.

Key Support Levels to Watch

Firstly, it’s worth keeping track of the $147 level. This area will likely provide support near a trendline that connects multiple peaks and troughs on the chart stretching between January 2018 and June last year.

Further selling could see a breakdown below the descending channel’s lower trendline and subsequent fall to around $137. Investors may be on the lookout for entry points in this region near a trendline that links the June 2017 peak with a range of comparable price action on the chart through to October 2020.

Major Resistance Levels to Monitor

Upswings in Johnson & Johnson shares could initially meet overhead resistance near the $167 level, currently just above the descending channel’s upper trendline. The stock may encounter selling pressure in this location near the March and September peaks, with the area also roughly aligning with trading activity extending back to February 2021.

Finally, a breakout above this level could see the shares climb to around $180. Investors may look for profit-taking opportunities here near the prominent August 2021 and December 2022 peaks, which both sit slightly below the stock’s record high.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above securities.



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Monthly Dividend Stock In Focus: SL Green Realty Corp


Updated on April 1st, 2025 by Nathan Parsh

Many investors find high-yielding stocks appealing because of the income they produce. This is why Real Estate Investment Trusts, or REITs, are so popular among dividend growth investors. REITs are required to pass along the majority of their income in the form of dividends.

SL Green Realty Corp (SLG) is a good example of a high-yielding REIT. The stock currently pays a 5.3% yield and pays a monthly dividend. There are currently fewer than 80 monthly dividend stocks.

You can download our full list of monthly dividend stocks (along with price-to-earnings ratios, dividend yields, and payout ratios) by clicking the link below:

 

The currently high dividend yield offers a substantial boost to expected total returns, making SLG an appealing investment option for income investors.

This article will analyze the investment prospects of SL Green in further detail.

Business Overview

SL Green Realty is an integrated that is focused on acquiring, managing, and maximizing the value of Manhattan commercial properties. It is Manhattan’s largest office landlord, with a market capitalization of $4.2 billion, and currently owns 54 buildings totaling 31 million square feet.

On January 23rd, 2025, SLG reported financial results for the fourth quarter of fiscal year 2024.

Nevertheless, due to a large gain ($0.36 per share) from debt extinguishment, funds from operations (FFO) per share more than doubled over the prior year’s quarter, from a depressed level of $0.72 to $1.81. This beat analysts’ estimates by $0.34. That said, its same-store net operating income dropped 2.7% over the prior year’s quarter.

The pandemic severely hit SLG, which has led many tenants to adopt a work-from-home model.

Office space occupancy in New York remains near historic lows, creating an unprecedented tenant-friendly environment. The exceptionally high FFO per share of $8.11 in 2024 resulted from some non-recurring gains. We project that FFO will decline significantly to $5.40 in 2025.

The trust’s occupancy rate edged up sequentially from 90.1% to 92.5% in Q4. Overall, occupancy rates are well below their pre-pandemic high.

Source: Investor Presentation

Office REITs have been hit especially hard in this environment as employees are working more from home relative to pre-pandemic levels, which has hurt demand for office REITs. This will be something investors will want to monitor as higher occupancy rates generally lead to improved fundamentals.

Growth Prospects

SLG benefits from long-term rental rate growth in Manhattan, one of the most popular commercial areas in the world. The REIT pursues growth by acquiring attractive properties and raising rental rates in its existing properties.

It also signs multi-year contracts (7-15 years) with its tenants to secure reliable cash flows. However, due to the ongoing downturn in the office REIT industry, SLG has seen its funds from operations per share grow at just 2.7% over the last decade.

Due to the pandemic’s impact on its business, the REIT’s funds from operations decreased in the three years prior to 2024. The pandemic has subsided, but the REIT has not begun to recover from the work-from-home trend yet.

Due to a high comparison base formed by the non-recurring gain from debt extinguishment this year, we expect FFO per share to increase at an annual rate of just 1% over the next five years.

Dividend and Valuation Analysis

SLG pays dividends monthly. At a current monthly rate of $0.2575 per share, SL Green has an annualized dividend payout of $3.09 per share, representing a 5.3% current yield.

While the dividend has been reduced recently, it looks sustainable at the current level, even considering interest rate headwinds and the still ongoing headwinds from increased working from home for this office REIT.

We expect SL Green to produce $5.40 of funds from operations per share in 2025, giving the stock a projected dividend payout ratio of 57% for the year. This is a relatively low payout ratio for a REIT. The trust has seemed to manage its business well, and management is experienced.

SLG has a decent balance sheet and a healthy BBB credit rating. It can also maintain its 5%+ dividend, which is well covered by cash flows. Thus, SLG is suitable for income-oriented investors who can patiently wait for the REIT’s recovery from the pandemic.

On the other hand, we note that SLG issued a large amount of debt to buy new properties last year and carries $4.2 billion of long-term debt on its balance sheet, which is more than 100% of the stock’s current market capitalization. We will continue to monitor the debt situation closely.

Final Thoughts

SL Green is a high-yielding REIT that is facing headwinds to its business. The COVID-19 pandemic caused increased working from home, which remains a headwind for Manhattan office occupancy rates.

On the other hand, SL Green also has some long-term growth potential given that it is concentrated in a high-demand area of New York City and since it continues to upgrade its portfolio over time via regular transactions.

The high dividend yield could allow for highly compelling total returns going forward. However, SL Green can’t be described as an especially low-risk stock due to the aforementioned headwinds for its business.

Don’t miss the resources below for more monthly dividend stock investing research.

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Monthly Dividend Stock In Focus: Main Street Capital


Updated on April 1st, 2025 by Nathan Parsh

Business Development Companies – or BDCs, for short – can be a great source of current yield for income investors.

Main Street Capital Corporation (MAIN) is a great example of this. MAIN stock has a current dividend yield of 5.2%, but the yield grows to 7.3% when factoring in the company’s special dividends.

Better yet, Main Street Capital stock pays monthly dividends.

You can download our full Excel spreadsheet of all 76 monthly dividend stocks (along with metrics that matter, like dividend yield and payout ratio) by clicking on the link below:

 

The stock’s high dividend yield and monthly payments make it a solid choice for income investors.

Main Street Capital’s business appears to be on solid footing. This article will discuss the investment prospects of Main Street Capital Corporation in detail.

Business Overview

Main Street Capital Corporation is a Business Development Company (BDC). Our full list is here.

The company operates as a debt and equity investor for lower middle market companies (those with $10-$150 million of annual revenues) seeking to transform their capital structures.

BDCs can invest in both debt and equity, which gives them an advantage over companies that invest in private debt or private equity alone.

Main Street Capital Corporation also invests in the private debt of middle-market companies (not lower middle-market companies) and has a budding asset management advisory business.

Source: Investor Presentation

Both transaction type and geography highly diversify holdings. By transaction type, the BDC acquires most of its deals via recapitalization and leveraged buyouts.

Main Street Capital Corporation also has a very high degree of industry diversification.

At the end of Q4 2024, Main Street had interests in 84 lower-middle-market companies (valued at $2.5 billion), 15 middle-market companies ($155 million), and 91 private loan investments ($1.9 billion).

Growth Prospects

Main Street Capital Corporation’s growth prospects come from its unique strategy of driving investment returns. In turn, the BDC sustains its high monthly dividend payout, and grows it over time.

On November 4th, 2024, Main Street Capital announced a 2.0% dividend increase to $0.25 per share paid monthly. The current annualized dividend payout is $3.00 per share.

On February 27th, 2025, Main Street Capital reported fourth-quarter and full-year results. The quarter’s net investment income increased to 0.2% to $90.4 million, compared to $90.1 million in Q4 2023. Net investment income per share of $1.02 declined 5% year-over-year.

Distributable net investment income per share totaled $1.08, which was down 4% from $1.12 in Q4 2023. Main Street’s net asset value ended the quarter at $29.20, an 8.4% increase from the end of the previous year.

Main Street has established a solid record in the past decade, with a nine-year and five-year net investment income per share CAGR of 7.2% and 10.3%, respectively.

We expect MAIN to grow its net investment income per share by 1% per year over the next five years.

Dividend Analysis

MAIN pays a monthly dividend. The company has also paid substantial supplemental dividends on various occasions. The most recent example was a supplemental payout of $0.30 per share that was declared on February 25th, 2025.

These are one-time special dividends, but we expect the company to continue this tradition of special dividends when distributable NII per share significantly exceeds its monthly dividend payouts.

The supplemental dividends have been a result of generating realized gains from Main Street’s equity investments.

Source: Investor Presentation

The dividend appears secure. For example, based on NII-per-share the company easily covered its dividend every year since 2021.

We expect MAIN to generate NII per share of $4.00 in 2025. With a forward annualized dividend payout of $3.00 per share, MAIN has an expected dividend payout ratio of approximately 75% for this year.

Its regular dividend growth and occasional special dividends imply that its dividend is in good shape.

To avoid corporate income tax as a BDC, Main Street must distribute at least 90% of its taxable income, leaving little wiggle room to fund growth.

While this strategy has worked extremely well since the last recession, we do caution that this method of funding becomes substantially less attractive (and more expensive) in weaker economic periods.

The main threat to the dividend is a recession, which would force many borrowers to default and cause interest rates on floating-rate loans to plummet.

As a result, earnings per share would likely decline rapidly, forcing the company to right-size its dividend. For now, however, the dividend appears to be safe.

Final Thoughts

Although Main Street Capital Corporation is off the radar for most dividend growth investors, this BDC has a strong history of delivering substantial shareholder returns.

The firm’s strong track record of superior investment management and expertise in the lower middle market segment gives it a strong competitive advantage in the private equity and debt industry.

Further, Main Street Capital Corporation is a shareholder-friendly BDC with a high yield and monthly payouts.

Further Reading: 20 Highest-Yielding BDCs

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Monthly Dividend Stock In Focus: Orchid Island Capital


Updated on April 1st, 2025 by Nathan Parsh

Investors are likely familiar with the standard real estate investment trusts, or REITs. Most REITs own physical real estate, lease the properties to tenants, and derive rental income, which is used to pay dividends.

However, investors may not be as familiar with a different set of REITs: mortgage REITs. These REITs do not own physical properties but rather buy mortgage securities.

Mortgage REITs typically have much higher dividend yields than standard REITs, but this does not necessarily make them better investments.

For example, Orchid Island Capital (ORC) is a mortgage REIT with an extremely high dividend yield of more than 19%. Orchid Island pays dividends each month, which makes it a compelling combination of a high yield and monthly dividend payments.

You can download our full Excel spreadsheet of all monthly dividend stocks (along with metrics that matter, like dividend yield and payout ratio) by clicking on the link below:

 

Orchid Island has an exceptionally high dividend yield and is one of the highest-yielding stocks that we cover.

However, the outlook for mortgage REITs is challenged, and Orchid Island’s dividend yield may still not be sustainable even after multiple dividend cuts in the past several years.

This article will discuss why income investors should not be lured by Orchid Island’s extremely high dividend yield.

Business Overview

Whereas traditional REITs own a portfolio of properties, mortgage REITs are purely financial entities. Orchid Island is an externally managed specialty finance REIT That invests in residential mortgage-backed securities, either pass-through or structured agency RMBSs.

An RMBS is a debt instrument that collects cash flows, based on residential loans such as mortgages, home-equity loans, and subprime mortgages. Mortgage-backed securities are an investment product representing a basket of pooled loans.

As investors saw first-hand during the 2008 financial crisis, mortgage-backed securities can be highly volatile and risky. That said, mortgage REITs were among the biggest winners as interest rates fell during the Great Recession’s aftermath.

Growth Prospects

Mortgage REITs make money by borrowing at short-term rates, lending at long-term rates, and pocketing the difference, or the spread between the two.

When the spread between short-term rates and long-term rates compresses, profitability erodes. This is why mortgage REITs can be dangerous if short-term interest rates are about to increase.

Source: Investor Presentation

Orchid Island has not been able to produce meaningful growth in the past several years. The trust has experienced extreme earnings volatility over the past several years, with a net loss in several years in the past decade and multiple years in which the trust barely generated a profit.

Orchid Island’s inability to perform well with interest rates at zero makes it unlikely that the trust can regain its footing in the current higher interest rate environment.

On January 30th, 2025, the company reported a net income of $0.07 per share for Q4 2024. In 2024, the company faced $236 million in net interest expenses and $16.7 million in total expenses, or $0.26 per share.

However, Orchid’s net realized and unrealized gains on RMBS and derivative instruments last year were $49.1 million, or $0.75 per share.

The book value per share declined to $1.01, or 11%, to $8.09, and the total return was 4.73%. The company paid dividends of $1.44 per share in 2024, contributing to the decrease in book value during the quarter.

Despite these challenges, Orchid maintained strong liquidity, holding $353.6 million in cash and unpledged securities, equivalent to 53% of stockholders’ equity. Additionally, the company’s borrowing capacity was well above outstanding repurchase agreements spread across 25 lenders.

Management, led by CEO Robert Cauley, emphasized its commitment to providing stable dividends to shareholders while closely monitoring the interest rate environment and prepayment speeds to adjust its portfolio strategy accordingly.

Looking forward, Orchid continues to focus on managing interest rate risk and maintaining a diversified RMBS portfolio. As of the end of 2024, its portfolio was valued at approximately $4.2 billion. The company aims to optimize its asset selection and hedging strategies to navigate the evolving economic landscape and deliver attractive risk-adjusted returns to shareholders.

Dividend Analysis

Orchid Island’s eroding fundamentals have caused a significant drop in its dividend payments to shareholders in the past several years.

Orchid Island currently pays a monthly dividend of $0.12 per share, but this is still below the split-adjusted monthly dividend it paid before 2021.

Source: Investor Presentation

Looking back further, Orchid Island’s monthly dividend payout has been reduced multiple times since then.

The trust’s current dividend payout is $1.44 per share on an annualized basis. Based on its recent closing price, the stock offers a 19.3% dividend yield. This is a huge dividend yield, considering the average dividend yield of the S&P 500 Index is currently 1.3%.

However, there are too many red flags for Orchid Island to be considered an attractive investment, including the trust’s multiple dividend cuts over the past few years and inconsistent profitability in that time. With an expected payout ratio of 178% for 2025, the risk for further dividend cuts is high.

In addition, Orchid Island has issued shares rapidly in recent years. Its share count has skyrocketed since 2013, but this comes at a steep cost to shareholders in the form of heavy dilution.

With a volatile dividend history, Orchid Island is not an appealing choice for investors looking for steady dividend payouts from year to year.

Orchid Island stock appears to be the definition of a yield trap. The stock has badly lagged behind the S&P 500 Index, and we believe this underperformance will continue.

Final Thoughts

Sky-high dividend yields can be deceiving. Orchid Island’s 19.3% dividend yield is enticing, but this stock has all the makings of a yield trap.

The trust has a sizable amount of debt on the balance sheet and is issuing shares at an alarming pace. The outlook for mortgage REITs has deteriorated as the Federal Reserve continues to hold interest rates high. The trust’s most recent Q4 results show a significant decline in net interest income and per-share book value.

Orchid Island cut its dividend several times in the past few years due to poor fundamental performance. Investors should tread very carefully with mortgage REITs like Orchid Island. As a result, income investors would be better served by buying higher-quality dividend stocks with more sustainable payouts.

Don’t miss the resources below for more monthly dividend stock investing research.

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STAG Industrial (STAG) | Monthly Dividend Safety Analysis


Updated on April 1st, 2025 by Nathan Parsh

The real estate industry is a great place for investors seeking yield. Intuitively, this is not surprising. Real estate owners collect predictable income from their tenants. Thus, the real estate business is qualitatively geared toward owners wanting to collect periodic income.

One of the best ways for investors to gain exposure to the real estate industry is through Real estate Investment Trusts – or REITs.

STAG Industrial (STAG) is a commercial REIT that leases single-tenant industrial properties throughout the US. The stock’s current dividend yield of 4.1% is more than triple the 1.3% average yield in the S&P 500.

Moreover, STAG Industrial pays monthly dividends (rather than quarterly). This is highly beneficial for retirees and other investors who rely on their dividend income to cover life’s expenses. There are currently 76 monthly dividend stocks.

You can download our full Excel spreadsheet of all monthly dividend stocks (along with metrics that matter, like dividend yield and payout ratio) by clicking on the link below:

 

Thanks to its high yield and its monthly dividend payments, STAG Industrial has the potential to be a great investment for income investors, particularly since the trust has a long runway of growth ahead.

Business Overview

STAG Industrial is a Real Estate Investment Trust (REIT). It owns and operates industrial real estate. It is focused on single-tenant industrial properties and has nearly 600 buildings across 41 states in the United States. This REIT’s focus on single-tenant properties might create higher risk compared to multi-tenant properties, as the former are either fully occupied or completely vacant.

Source: Investor Presentation

STAG Industrial executes a deep quantitative and qualitative analysis of its tenants. As a result, it has incurred credit losses that have been less than 0.1% of its revenues since its IPO.

The trust typically does business with established tenants to reduce risk. Moreover, STAG Industrial has limited exposure to any specific tenant. STAG has an added advantage thanks to its exposure to e-commerce properties, which gives it access to a key growth segment in real estate.

The penetration rate of e-commerce is expected to grow from 14% in 2021 to 30% by 2030. This secular shift in consumer behavior will provide a strong tailwind to STAG’s business for the next several years.

STAG is currently facing a headwind due to the rise of interest rates. However, the effect of the higher interest rates on the REIT has been limited so far, thanks to the high credit profile of its tenants.

Some REITs view single-tenant properties as risky because they are binary propositions; they are either fully leased or empty. However, focusing on single-tenant properties creates mispriced assets, which STAG can add to its portfolio at attractive valuations. This is central to STAG’s strategy and is a key differentiator among competitors.

STAG’s addressable market is in excess of $1 trillion, a significant portion of which comprises single-tenant properties. The sector is highly fragmented, meaning that no particular entity would have a considerable scale advantage. This is why STAG believes it can purchase mispriced assets.

STAG finds this to be an attractive mix of assets. Combined with relatively low capex and high retention rates, it has created a strong portfolio of industrial real estate.

STAG’s tenant profile reflects the vast diversification it has built into its portfolio. This diversification greatly mitigates the risk of owning single-tenant properties. STAG has done a nice job of taking a relatively risky sector of real estate—single-tenant properties—and building a portfolio that greatly reduces that risk.

Growth Prospects

STAG Industrial’s growth since its IPO in 2011 has been impressive from both a fundamental and an investor return perspective. Fortunately, this real estate trust still has ample room for future growth.

The trust reported strong growth in its financial and operating results for Q4 2024 on February 12th, 2025.

The trust achieved net income of $0.28 per share, up from $0.23 in Q4 2023, with total net income rising to $50.9 million. Core FFO per share grew 5% to $0.58 for the quarter, while Cash NOI increased by 8.6% to $155.5 million. Same-store cash NOI improved 4.4% to $139.2 million. This growth was driven by the sustained strength of the REIT’s tenants and hikes in rent rates.

Source: Investor Presentation

The trust made significant moves during the quarter, acquiring 15 buildings totaling 2.4 million square feet for $293.7  million and selling two buildings for $29.4 million. STAG’s portfolio maintained a high occupancy rate of 96.5%, though this was a 60% basis point decline year-over-year. The operating portfolio occupancy rate was slightly higher at 97.5%. New leases covered 279K square feet with significant rent growth, and 76.9% of expiring leases were renewed.

New leases for the year covered 2.86 million square feet with cash rent growth of more than 28% for new and renewed leases, while 76.6 of expiring leases were renewed.

Moody’s reaffirmed STAG’s Baa3 rating and upgraded its outlook from Stable to Positive in June 2024, demonstrating the trust’s improving fundamentals.

Dividend Analysis

STAG is a high-dividend REIT. Its dividend is obviously very important, as investors generally own REITs for their payouts. STAG’s payout has grown yearly since its IPO and is currently $1.49 per share. However, dividend growth since 2015 has been minimal, averaging only 1.0% yearly.

We do not see material growth in the dividend moving forward. Still, STAG’s payout ratio, which currently stands at 60% of expected FFO-per-share for 2025, provides a meaningful margin of safety for the dividend. We expect STAG to continue raising its dividend very slowly for the foreseeable future to avoid ending up in a tight spot like it did in the earlier half of the trailing decade.

The payout ratio is down significantly from its 2016 level of near 100%, as STAG has made a concerted effort to reduce the vulnerability of its dividend. However, that effort is still underway, and hence, we see meaningful payout growth as unlikely in the near term.

The current payout ratio, combined with our expectations for mid-single-digit FFO-per-share growth in the coming years, should gradually improve the safety of STAG’s dividend. The trust has also made divestitures when pricing is favorable, an option it could use to temporarily cover dividend shortfalls. In short, we view the REIT’s 4.1% dividend yield as safe for the foreseeable future.

Final Thoughts

STAG Industrial has two characteristics that immediately appeal to income investors: a 4.1% dividend yield and regular monthly dividend payments. In addition, REIT has promising growth prospects and are reasonably valued. As a result, it can offer a total average annual return of about 10% over the next five years.

We like the trust’s strategy for long-term growth in a real estate sector that investors sometimes ignore due to its perceived riskiness. Thus, STAG Industrial is a good potential addition to a high-yield portfolio, thanks to its high dividend yield, monthly dividend payments, and leadership in the single-tenant industrial real estate market. Overall, STAG Industrial seems an attractive candidate for income-oriented investors, especially in the highly inflationary investing environment prevailing right now..

Don’t miss the resources below for more monthly dividend stock investing research.

And see the resources below for more compelling investment ideas for dividend growth stocks and/or high-yield investment securities.

Thanks for reading this article. Please send any feedback, corrections, or questions to [email protected].





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