Three Stocks Offering Monthly Dividends for Reliable Passive Income

Dividend stocks have always been a popular choice for investors looking to generate passive income, and real estate investment trusts (REITs) are particularly attractive due to their consistent dividend payouts. With recent economic data pointing towards potential interest rate cuts by the Federal Reserve, the real estate sector may be poised for growth. Lower borrowing costs can enhance the profitability and dividend-paying capacity of REITs, making them an appealing option for income-focused investors.

In this article, we will take a closer look at three REITs that not only pay dividends on a monthly basis but also have a track record of at least two years of dividend growth, are buy-rated by analysts, and are currently trading below their mean price targets. These REITs offer investors the opportunity to earn consistent passive income while also potentially benefiting from capital appreciation.

Monthly Dividend Stock #1: STAG Industrial (STAG)
STAG Industrial is a REIT that specializes in acquiring, owning, and operating single-tenant industrial properties across the United States. With a diversified portfolio of 570 buildings in 41 states, STAG maximizes cash flows and enhances shareholder value. The company has a solid track record of paying monthly dividends, with an annualized dividend of $1.48 per share and a forward yield of 4.06%. Over the past five years, STAG has grown its dividend payments at a rate of 5.1% per year.

In its first-quarter 2024 earnings report, STAG reported funds from operations (FFO) of $0.59 per share, beating analysts’ estimates. Revenue for the quarter exceeded expectations, with key metrics showing positive growth. Analysts have a generally positive outlook on STAG, with a consensus rating of “Moderate Buy” and a mean price target of $39.36, suggesting an upside potential of approximately 8.2%.

Monthly Dividend Stock #2: Whitestone REIT (WSR)
Whitestone REIT specializes in managing open-air retail centers in thriving Sunbelt cities such as Phoenix, Houston, and San Antonio. The company strategically selects a mix of tenants to serve community needs effectively, including restaurants, grocers, and fitness centers. Whitestone has been paying monthly dividends for over 13 years, with a current monthly dividend of $0.04 per share and an annual yield of about 3.97%.

Despite some mixed numbers in its Q1 earnings report, Whitestone REIT has maintained stable occupancy rates and cash flow thanks to its focus on necessity-based retail and prime locations in high-growth markets. Analysts are optimistic about Whitestone, with a consensus rating of “Moderate Buy” and an average price target of $14.17, offering a 14.2% upside potential.

Monthly Dividend Stock #3: Agree Realty Corporation (ADC)
Agree Realty Corporation is a retail REIT powerhouse that owns 2,161 properties across 49 states, leasing to top retail tenants. The company’s portfolio is 99.6% occupied, showcasing its strong market presence. ADC has been paying quarterly dividends since 1994, with the latest dividend at $0.25 per share, translating to a 4.97% annual yield. Over the past five years, ADC has grown its dividend at a solid 6.11% compound annual growth rate (CAGR).

In its Q1 2024 earnings report, ADC reported solid core FFO and AFFO per share, along with revenue that exceeded analyst predictions. With plans to acquire around $600 million worth of properties for the year and ample liquidity, ADC is set for continued growth. Analysts are bullish on ADC, with a consensus rating of “Strong Buy” and an average price target of $65.91, suggesting a 9.4% upside potential.

Building a Diversified Portfolio with Monthly Dividend REITs
In conclusion, investing in monthly dividend REITs like STAG Industrial, Whitestone REIT, and Agree Realty Corporation can provide investors with a steady stream of income and potential earnings growth. These REITs offer stability, growth potential, and monthly cash flow, making them attractive options for income-focused investors. By adding these REITs to their investment mix, investors can build a diversified portfolio that generates consistent passive income while also offering the potential for capital appreciation.