Which REITs pay the highest dividend?
For investors seeking a steady stream of monthly income, real estate investment trusts (REITs) that pay dividends on a monthly basis emerge as a compelling financial strategy. In this article, we unravel two REITs that pay monthly dividends and have yields up to 8%.
| Symbol | Fund name | 1-year return |
|---|---|---|
| BRIUX | Baron Real Estate Income R6 | 12.08% |
| JABIX | JHanco*ck Real Estate Securities R6 | 11.07% |
| RRRRX | DWS RREEF Real Estate Securities Instil | 9.26% |
| CSRIX | Cohen & Steers Instl Realty Shares | 9.84% |
For investors seeking a steady stream of monthly income, real estate investment trusts (REITs) that pay dividends on a monthly basis emerge as a compelling financial strategy. In this article, we unravel two REITs that pay monthly dividends and have yields up to 8%.
Altria Group (MO)
The company offers the highest dividend yield in the Dividend Kings list, with an annual dividend rate of $3.92 or a 9.5%. MO has consistently increased its dividends 58 times over the last 54 years.
| Stock | Trailing annual dividend yield* |
|---|---|
| AT&T Inc. (T) | 6.3% |
| Verizon Communications Inc. (VZ) | 6.3% |
| Healthpeak Properties Inc. (DOC) | 6.6% |
| Altria Group Inc. (MO) | 8.8% |
Buffet and REITs
However, Berkshire sold its holdings of STORE Capital in 2022 after the company announced it was being acquired by two outside investment funds. Since then, filings have shown that Berkshire Hathaway has not owned shares of any other REIT.
| REIT | Forward dividend yield |
|---|---|
| Blackstone Mortgage Trust Inc. (BXMT) | 12.1% |
| KKR Real Estate Finance Trust Inc. (KREF) | 13.5% |
| Easterly Government Properties Inc. (DEA) | 8.3% |
| Realty Income Corp. (O) | 5.5% |
They historically offer competitive long-term performance, with consistent returns compared to stocks and bonds. REITs provide attractive income through dividends, liquidity, transparency, and diversification, enhancing risk-adjusted returns.
AGNC Investment, the dividend that just quits
It has been cut multiple times over the past dozen years. The stock has tracked the dividend lower, as well, so not only are investors collecting less income, they are also sitting on capital losses. To be fair, AGNC is a mortgage real estate investment trust (REIT).
| Ticker | Name | Dividend Yield |
|---|---|---|
| ARCC | Ares Capital | 9.49% |
| HIW | Highwoods Properties | 8.45% |
| ENB | Enbridge | 8.18% |
| EPD | Enterprise Products Partners | 7.27% |
What is an excellent dividend yield?
What Is a Good Dividend Yield? Yields from 2% to 6% are generally considered to be a good dividend yield, but there are plenty of factors to consider when deciding if a stock's yield makes it a good investment. Your own investment goals should also play a big role in deciding what a good dividend yield is for you.
| Ticker | Name | Yield |
|---|---|---|
| (T ) | AT&T | 5.61% |
| (CTL ) | CenturyLink Inc. | 5.59% |
| (WMB ) | Williams Cos. | 5.52% |
| (FCX ) | Freeport McMoran | 5.42% |
The Company normally pays dividends four times a year, usually April 1, July 1, October 1 and December 15. Shareowners of record can elect to receive their dividend payments electronically or by check in the currency of their choice.
- Verizon Communications VZ.
- Johnson & Johnson JNJ.
- Philip Morris International PM.
- Altria Group MO.
- Comcast CMCSA.
- Medtronic MDT.
- Pioneer Natural Resources PXD.
- Duke Energy DUK.
The Coca-Cola Company's ( KO ) dividend yield is 3.32%, which means that for every $100 invested in the company's stock, investors would receive $3.32 in dividends per year. The Coca-Cola Company's payout ratio is 74.22% which means that 74.22% of the company's earnings are paid out as dividends.
Dividends can be classified either as ordinary or qualified. Whereas ordinary dividends are taxable as ordinary income, qualified dividends that meet certain requirements are taxed at lower capital gain rates.
| # | Name | M. Cap |
|---|---|---|
| 1 | Prologis 1PLD | $95.91 B |
| 2 | American Tower 2AMT | $80.10 B |
| 3 | Equinix 3EQIX | $70.57 B |
| 4 | Welltower 4WELL | $53.86 B |
Conclusion. Warren Buffet prefers to invest in REITs instead of real property because they are a great source of passive income, are reward-oriented, and are more liquid than property ownership.
Stocks Warren Buffett is buying
Shares in Chevron (CVX), the only energy name among Dow Jones stocks, spent much of Q4 trading below $150 a share.
Direct real estate offers more tax breaks than REIT investments, and gives investors more control over decision making. Many REITs are publicly traded on exchanges, so they're easier to buy and sell than traditional real estate.
Why not to invest in REITs?
The value of a REIT is based on the real estate market, so if interest rates increase and the demand for properties goes down as a result, it could lead to lower property values, negatively impacting the value of your investment.
“I recommend REITs within a managed portfolio,” Devine said, noting that most investors should limit their REIT exposure to between 2 percent and 5 percent of their overall portfolio. Here again, a financial professional can help you determine what percentage of your portfolio you should allocate toward REITs, if any.
Risks of investing in REITs include higher dividend taxes, sensitivity to interest rates, and exposure to specific property trends.
Reinvesting REIT dividends can help retirement savers grow their portfolio's investment, and historically steady REIT dividend income can help retirees meet their living expenses.
REITs and stocks can both pay dividends, usually on a monthly, quarterly, or yearly basis. Some investments will also offer special dividends, but they're unpredictable.
