3 REITs With Monthly Dividends

09/12/2017 2:52 am EST

Focus: REITS

Chloe Jensen

Chief Analyst, Cabot Dividend Investor

Monthly dividend stocks are rare, but investors like them for a reason. If you’re retired, stocks that pay dividends monthly are a perfect source of regular income you can use to pay bills, rent or buy groceries. Non-retirees also find monthly dividends attractive because they compound faster, says Chloe Lutts Jensen, editor of Cabot Dividend Investor.

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But as I said, there aren’t very many monthly dividend stocks, and only a handful of them are good investments. However, the ones that are worth buying can be quite high-yielding, and offer enviably consistent monthly income.

Below, I’ve rounded up all the monthly dividend stocks that I think are worth your time, with details on the dividend, yield and background of each.

Chatham Lodging Trust (CLDT) is a hotel REIT. The company buys existing hotels that it believes it can add value to by re-branding, renovating or changing management. Its brands include Marriott, Hyatt and Hilton.

The REIT has paid dividends consistently since coming public in 2010, and began paying monthly dividends in 2013. Management increased the dividend by 10% last year.

Technically, CLDT peaked in late 2014, and then began a year-long downtrend that made 40% of the stock’s value disappear. But CLDT leveled out in 2016, and has been trading about sideways since.

Analysts expect Chatham’s revenues to be about flat this year, and to rise 1% next year. That’s not impressive growth, but it should be enough to maintain CLDT’s 6.5% yield.

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Gladstone Commercial (GOOD) is another REIT, but it primarily owns office and industrial properties. The company owns 94 properties, and its biggest tenant is GM.

The company has been public since 2003 and has paid monthly dividends since 2005. The dividend is very reliable—it has held steady at 13 cents per month since 2008. At the current price, GOOD yields a generous 6.9%.

Revenues have increased in each of the last five years, so a dividend increase could be in the future soon. And GOOD the stock managed to hit new all-time highs earlier this year, so the future looks bright.

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Gladstone Land (LAND) is also a REIT. This one, as you might suppose from its symbol, owns and leases farmland. The REIT offers better dividend growth than its commercial sibling; LAND has already increased its dividend three times in the last 12 months (from 4.1 cents to 4.4 cents). And LAND has paid dividends every month since coming public in 2013.

LAND declined for most of 2014 and 2015, but started a new uptrend early in 2016, and is now near 52-week highs after gapping up in August. At the current price, LAND yields 3.8%. Investors who want diversified real estate exposure can consider adding some LAND to their portfolios.

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As the name implies, Realty Income (O) is a REIT that is serious about income. Founded to provide investors with rising monthly income, O has paid a dividend every month since coming public in 1994, and has increased the dividend every year since 1996. Today, the REIT yields 4.4%.

Realty Income owns over 5,000 properties, mostly free-standing commercial buildings leased to non-discretionary retailers like convenience stores, dollar stores and drug stores.

Because of its strong track record, O is one of the largest, most well-known and widely held of the monthly dividend payers. The stock has relatively low volatility, and is a good choice for any investor looking for monthly income.

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