Monthly Dividend Stock In Focus: Modiv Inc.

Published on April 8th, 2025 by Nathan Parsh

Real estate investment trusts, or REITs, are often popular for those looking for generous dividend yields. REITs are required by law to pay out the vast majority of income in the form of dividends.

As a result, many REITs pay very high dividend yields. One example is Modiv Inc. (MDV), which currently offers a yield of 8.0%.

Some REITs, such as Modiv, even pay dividends monthly rather than quarterly or annually, which can appeal to investors looking for more consistent cash flows.

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:

But investors shouldn’t focus solely on yield when assessing an investment opportunity. This article will analyze Modiv’s investment prospects in detail to determine whether investors should consider adding the name to their portfolio.

Business Overview

Modiv is a real estate investment trust that acquires, owns, and actively manages single-tenant net-lease industrial, retail, and office properties in the U.S.

Source: Investor Relations

Modiv has 43 properties in its portfolio that occupy 4.5 million square feet of aggregate leasable area.

Source: Investor Relations

The trust had its public listing in 2022. Prior to this, Modiv was one of the largest non-listed REITs to raise funds entirely via crowdfunding. The trust was the first real estate crowdfunding platform to be entirely investor-owned.

Growth Prospects

Modiv has only been a publicly traded entity for a short time, but management has aimed to acquire high-quality properties that can be added to the portfolio. This has led to a focus primarily on adding industrial properties. For example, Modiv added four industrial and one retail properties to the portfolio last year.

Despite a heavy acquisition spree, Modiv is still a rather small REIT as evident by its market capitalization of just $144 million. Even after a number of acquisitions, the total portfolio is slightly more than 40 properties.

It will take time and capital for the trust to become one of the larger names in its real estate area. REITs often use share issuances to gain the capital needed for acquisitions, but this comes at a cost for Modiv due to the stock’s high single-digit yield. Due to this hefty yield, the share count has remained relatively stable, though we do anticipate that the trust will use this avenue to help acquire attractive properties in the future.

Financing debt to fund transactions might also be difficult due to Modiv’s being one of the smaller players in its industry. Creditors may require a higher interest rate, which will likely act as a headwind.

The good news is that Modiv’s portfolio does offer some advantages. For example, the weighted average lease term is 113.8 years, which should provide the trust with predictable cash flows. Some of the trust’s tenant base can be considered high-quality as Modiv counts 3M Company (MMM), Costco Wholesale Corp. (COST), and Northrop Grumman Corp. (NOC) as three of its tenants.

Finally, the properties leased to tenants can be considered mission-critical for their business, meaning that they are needed for these companies to perform their basic functions. However, this doesn’t necessarily make Modiv recession-proof, as an economic downturn could impact the need for these facilities. We note that the trust has also not operated under adverse economic conditions as of yet.

Given the trust’s relative youth and the likelihood of share issuance to fund acquisitions, we believe that AFFO will remain stable through 2030.

Dividend & Valuation Analysis

The dividend is the most attractive part of Modiv from an investment angle in our view.

Modiv’s dividend currently yields 8.0%, more than five times the average yield of 1.5% for the S&P 500 Index. This is one of the higher yields the stock has traded with since Modiv went public.

Modiv’s projected payout ratio is 85% for 2025. This is a decent payout ratio, considering REITs typically have loftier payout ratios. While we believe that the dividend yield is safe for now, we would prefer a lengthier track record of payments before fully trusting the security of the trust’s dividend.

Given the payout ratio, we forecast that dividends will remain flat through 2030 unless AFFO grows faster than anticipated.

Shares of Modiv trade at $14.50 per share, giving the stock a price-to-AFFO ratio of just under 10.5. This is slightly above our five-year target valuation of 10.0 times AFFO. Reverting to our target valuation would subtract slightly from total annual returns moving forward. Overall, we project total annual returns in the mid-to-high single-digit range over the next five years, powered almost entirely by the stock’s dividend yield.

Final Thoughts

Modiv is a new name in real estate and has some interesting characteristics. The trust is motivated to grow, with acquisitions expanding its portfolio since becoming a publicly traded. The stock also offers one of the more generous dividend yields in our coverage universe. The dividend does look safe, but short-term headwinds, such as debt financing or a possible recession, could call that safety into question.

Considering that the dividend accounts for nearly all of our total return projection, we believe investors would be better off looking for more secure yields. For this reason, Modiv earns a hold recommendation at the current price.

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.