Hot Properties: 3 Real Estate-Related High Yield Dividend Stocks

Monthly dividend stocks are attractive for income investors who are looking for more frequent payouts. Most stocks that pay dividends do so on a quarterly or semi-annual schedule.

But monthly dividend stocks pay shareholders each month, for 12 payments per year.

And, there are many monthly dividend stocks with high yields. This article will discuss three high yielding monthly dividend stocks today.

Modiv Industrial: Predictable Cash Flow

Modiv Industrial MDV (formerly known as Modiv) is a real estate investment trust, which, as its name suggests, aims to pay monthly dividends to its shareholders. The company acquires, owns, and actively manages single-tenant net-lease industrial, retail, and office properties in the United States, focusing on strategically essential and mission-critical properties with predominantly investment-grade tenants.

As of its most recent filings, the company’s portfolio was made up of 42 properties that occupied 4.5 million square feet of aggregate leasable area. The company generated $46.9 million in revenues last year and is based in Costa Mesa, California.

Modiv reported second-quarter earnings on Aug. 6, showing rental income came in at $11.3 million, down 4.2% year over year. This was mainly because of the elimination of some non-triple-net-lease reimbursements related to the August 2023 portfolio disposition of 13 properties. Management fee income was stable at nearly $66 million.

Adjusted funds from operations was $3.9 million, or $0.34 per diluted share, vs. adjusted funds from operations of $3.3 million, or $0.31 per diluted share, in the prior year period. For fiscal 2024, we expect adjusted funds from operation per share to be close to $1.56 based on the company’s current leasing profile.

Management has been primarily focused on acquiring industrial properties, but they’ve stated they may also target other types, including retail properties, data centers, and storage properties. For instance, in 2022, the company acquired four industrial properties and one retail property. Modiv’s strategy is to keep on acquiring more properties, which it hopes will be accretive to adjusted funds from operation per share over time.

Some notable qualities of MDV include a lengthy weighted average lease term of 13.6 years, which should provide predictable cash flow. And Modiv seems to have a quality tenant base as well, including Costco COST, 3M MMM, and Northrop Grumman NOC.

MDV stock currently yields 7.9%.

SL Green Realty: Good Guidance 

SL Green Realty Corp. SLG was formed in 1980. It is an integrated real estate investment trust (REIT) 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 $4.5 billion, and currently owns 55 buildings totaling 32 million square feet. SLG last summer sold its 50% stake in 245 Park Avenue for $1 billion. Since then, the stock has more than doubled, as the sale signaled that the assets of the REIT are probably worth more than the market valued them.

In mid-July, SLG reported second quarter of fiscal 2024 results, revealing its occupancy rate edged up sequentially from 89.2% to 89.6%, but its same-store net operating income dipped 1.3% over the prior year’s quarter.

Due to a large gain of $0.69 per share from debt extinguishment, funds from operations (FFO) per share grew 43% over the prior year’s quarter, from $1.43 to $2.05, beating the analysts’ consensus by $0.40. SLG has been severely hit by the pandemic, which has led many tenants to adopt a work-from-home model. Occupancy of office space in New York remains near historic lows.

On the bright side, thanks to early extinguishment of debt, SLG raised its guidance for FFO per share in 2024 from $7.35 $7.65 to $7.45-$7.75.

SLG benefits from long-term growth in rental rates in one of the most popular commercial areas in the world, Manhattan. The REIT pursues growth by acquiring attractive properties and raising rental rates in its existing properties. It also signs multi-year contracts of 7-15 years with its tenants in order to secure reliable cash flows.

SLG is under pressure due to the work-from-home trend, which has resulted from the pandemic. However, it has a decent balance sheet, with a healthy BBB credit rating. As a result, it can endure the ongoing crisis and emerge stronger whenever the work-from-home trend subsides. It can also maintain its dividend, with a healthy payout ratio of 39%. SLG stock currently yields 4.8%.

Agree Realty: An Agreeable Choice

Agree Realty ADC is an integrated real estate investment trust (REIT) focused on ownership, acquisition, development, and retail property management. Richard Agree founded Agree Development Company in 1971, which is the predecessor to Agree Realty Corporation.

Agree has developed over 40 community shopping centers throughout the Midwestern and Southeastern United States. The company owns 1,839 properties located in 48 states, containing approximately 38.1 million square feet of gross leasable space.

The company's business objective is to invest in and actively manage a diversified portfolio of retail properties net leased to industry tenants. Agree Realty has paid a growing dividend for 11 consecutive years.

Agree Realty Corp. reported second quarter results earlier this summer, showing strong financial performance for the second quarter of 2024, reflecting significant growth in key metrics. The company invested $203 million in 70 retail net lease properties and initiated five development projects with $19 million in committed capital.

Net income per share for the quarter rose by 25.6% to $0.52, and adjusted funds from operations per share increased by 6.4% to $1.04. The company also declared a monthly dividend of $0.250 per common share, marking a 2.9% year-over-year increase. Additionally, a $450 million bond offering was completed, contributing to a robust liquidity position of $1.7 billion. For the first half of 2024, Agree Realty demonstrated consistent growth, with net income per share increasing by 11.3% to $0.95, and AFFO per share up by 5.5% to $2.07. The company invested $343 million in 102 retail net lease properties and committed over $101 million to 25 development projects.

Monthly cash dividends declared during the first half totaled $1.491 per common share, reflecting a 2.9% increase from the previous year. The company's financial results highlight a well-positioned balance sheet with a net debt to recurring earnings before interest, taxes, depreciation and amortization ratio of 4.1 times. Looking ahead, Agree Realty raised its 2024 AFFO per share guidance to a range of $4.11 to $4.14 and increased its acquisition guidance to approximately $700 million.

Agree Realty also has a solid balance sheet. The company has a BBB credit rating from S&P and a debt-to-equity ratio of 0.5. With a dividend payout ratio of 73% for 2024, ADC’s dividend is secure. ADC stock currently yields 4.2%.

At the time of publication, Ciura had no position in any stocks mentioned.