The bills flow in monthly, so it’s beneficial when the dividend income flows in monthly as well. Matching assets to liabilities is, after all, sound financial planning.
If the monthly dividends flow in at a high yield, all the better. We all want a little more bang for the investment buck. That is, we all want a little more bang for the buck as long as bang doesn’t blow up the portfolio’s risk profile. We want the extra yield, but we want to avoid the extra risk.
Here’s the good news: I see high yield and little additional risk in the following three monthly dividend stocks.
Gladstone Commercial Corp. (NASDAQ: GOOD) is the Rodney Dangerfield of commercial real estate investment trusts: It can’t get any respect, though it surely deserves it.
Size is an issue. Gladstone is a small-cap – $390 million market cap – commercial REIT few institutions follow. Gladstone owns a diversified real estate portfolio composed of 99 properties covering 24 states. Most of the properties are for office, retail and industrial use. Gladstone’s occupancy rate – at 97.3% – is top-shelf among its peers.
Gladstone’s dividend yield – at 8.6% – is also top-shelf. What’s more, the yield has been historically safe. Gladstone has never missed or cut in its dividend in its 13-year history as a publicly traded REIT. That history includes the 2008-2009 economic depression. Gladstone has not only never reduced its dividends, it has increased it four times over the past 13 years.
Though not quite as remunerative as Gladstone’s dividend, STAG Industrial’s (NYSE: STAG) dividend is worth considering. After all, a safe 6.6% yield is worth considering in a world where a 10-year U.S. Treasury note yields a mere 1.75%.
STAG is a niche REIT. As you can no doubt glean from the name, industrial real estate is the niche. STAG owns 291 properties – warehouses and distribution centers mostly – spread across 38 states.
The opportunity for growth is another draw. The market for warehouses and distribution centers is valued at over $1 trillion. The market is extraordinarily fragmented with the largest owner controlling less than 3% of the market.
There is plenty of opportunity for institutional consolidation, which STAG has exploited. Over the past five years, STAG has acquired over $1.7 billion worth of properties, representing property growth of 305%. Last year alone, STAG acquired 49 industrial properties valued at $427 million. That’s 24% annualized growth.
Speaking of growth, since its 2011 initial public offering, STAG has increased its dividend at a 6% average annual rate. STAG’s starting dividend yield might be lower than Gladstone’s, but in time it will catch up.
A peaceful, easy feeling – that’s the best description of Nuveen Preferred Securities Income Fund (NYSE: JPS).
Nuveen owns a diversified portfolio of quality preferred stocks. The yield on the portfolio is ramped up by the judicious use of low-rate, short-term leverage. This enables Nuveen to pay a higher yield – at 7.9% – than what’s available on the individual preferred issues.
Nuveen is a personal favorite. It has been a High Yield Wealth recommendation for nearly four years. All Nuveen does is continually pump out reliable monthly dividends. The current monthly dividend is pumped out at the rate of $0.059 per share. That might sound miserly until you consider it totals to $0.71 a year on a $9 investment.
Yes, I’ll concede, Gladstone, STAG and Nuveen are hardly the next Facebook (NASDAQ: FB) in waiting, but they’re not the next Webvan, either (Who? Exactly). They’re simply solid, high-yield monthly dividend payers that help you pay the bills and sleep at night.
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