Monthly dividends are better for matching expenses and enable faster compounding of returns. In this article, I highlight two REITs that pay monthly dividends that are well covered by FFO. Both carry solid leverage ratios and are demonstrating portfolio strengths in the current economic environment.
REITs are priced at their lowest valuations since 2008. But that does not mean that all REITs are worth buying. Here are three REITs that I would consider selling.
Agree Realty has grown its high-yielding dividend by more than 5% annually for a decade. Extra Space Storage has delivered outsized dividend growth over the years.
There is significant mispricing among triple net REITs due to a lack of consideration for changing the tenant landscape. Net store openings indicate positive occupancy and rental rates, but some REITs are exposed to troubled areas. REITs with exposure to CVS and Walgreens may face challenges with lease expirations, requiring substantial capex and potential revenue disruption.
Agree is a retail REIT focused on resilient companies with omnichannel growth strategies. It recently switched to a monthly dividend payout model.
Today, we are taking a look at two different investment choices for investors looking to grow their passive income. Not only do these two help to bring in passive cash flow, but they also pay monthly and have been growing their dividends over time. Investments that can grow their dividends over time help to provide even further compounding along with fresh capital that might be put to work.
Agree Realty's 5% yield is well above the REIT average of 4.3%. The net-lease REIT is large, but not so large that growth will be slowed by its size.
Our investment strategy is focused on safe stocks that generate reliable income above the market level. Two companies, Realty Income and Agree Realty, are highlighted as the main income and safety generators in our portfolios. These REITs are core positions in our portfolios.
Agree Realty Corporation reported a 3.5% increase in core funds from operations and a 4.5% increase in adjusted FFO for Q1-2024. ADC expects to acquire a substantial volume of properties in 2024, accounting for close to 8.75% of its market cap. We examine the REIT on valuation metrics and tell you why we still own other plays.
Dell Technologies and Nvidia have seen significant capital appreciation over the past year. However, strong rallies don't last forever, and many high expectations have already been baked into those stocks. Instead, investors could consider undervalued stocks like TC Energy and VICI Properties, which offer high dividends and steady long-term growth potential, giving investors opportunity to dollar cost average.
Agree Realty's common and preferred shares have experienced weakness, with the preferreds trading at a 32% discount to their liquidation value. The REIT's outlook for AFFO to grow by 4.2% at the midpoint in 2024 means the dividend is 137% covered. ADC's debt maturities are extremely back-loaded, providing enhanced capacity for acquisition volume and AFFO growth.
Realty Income is the largest net-lease REIT you can buy. Agree Realty is a retail-focused net-lease REIT with a fast-growing business.