Income investors often rely on dividend stocks to protect themselves from inflation and market volatility. Companies that have stable cash flows and businesses are able to pay out earnings to shareholders as a reward for them being loyal to the company.
Similarly, retirees seek a stable income stream in the form of proven dividend-paying stocks. In that category for their stable payouts, real estate investment trusts (REITs) are the most well known.
However, not all REITs are the same, some pay dividends quarterly, others monthly, thus Finbold researched two moderate-buy REITs that pay monthly dividends that investors should have on their watchlists.
Pembina Pipeline Corp (NYSE: PBA)
Pembina possesses key energy infrastructure assets mostly in the region of Western Canada, with a current market cap of $26.7 billion. The start of 2022, highlighted the importance of energy producers in stable countries since the war in Ukraine disrupted global energy markets.
Meanwhile, PBA’s business is divided into three divisions: pipelines, facilities, and marketing & new ventures. With over 18,000 kilometers of pipelines, this division of the company accounts for 58% of earnings. Furthermore, the company managed to have roughly $2.41, billion of revenue, beating estimates by $561 million.
Additionally, the earnings beat was also evident in the earnings per share, which were $0.64, representing a beat of $0.11. This allows the company to have a 4.95% dividend yield, currently paying out $0.164 per share on a monthly basis.
On the whole, shares are up over 30% year-to-date (YTD), creating a steady upward momentum since the start of 2022. Trading volumes have been steady and the stock is trading above all daily Simple Moving Averages, while a possible resistance to the downside could be around $35, for investors looking to get into the stock.
Presently, analysts on Wall Street deem the shares a moderate buy, predicting that the average next 12 months price could reach $42.15, which is 4.75% higher than the current trading price of $40.15.
STAG Industrial, Inc. (NYSE: STAG)
With NASDAQ being in bear territory officially, companies that are tied to high-tech cohorts trading on the said index suffered the same fate by proxy. STAG is an industrial REIT offering 110.1 million square feet of industrial real estate spread over 551 properties and 40 states. The enterprise value of the assets is said to be at $9.9 billion while the current market cap of the company is $6.2 billion.
Earnings for Q1 of 2022 saw a year-over-year (YoY) revenue growth of 18.8% to $159.21 million, beating estimates by $2.83 million. Similarly, EPS was $0.53, representing a beat of $0.01. These numbers allow the company to have a 4.38% dividend yield, paying out $0.1217, per share, each month.
Notably, due to recessionary fears, the company’s shares were hit losing 29% YTD. More recently the shares have bounced off of the resistance above $31 on increased volumes.
However, STAG stock is still trading below all daily SMAs potentially representing an entry point for dividend investors.
Nonetheless, analysts deem the shares a moderate buy, predicting that the average next 12 months price will reach $44.14%, which is 32.55% higher than the current trading price of $33.30.
In conclusion, dividends offered by such monthly paying stocks can be used for reinvestment purposes to better utilize the effects of compounding. According to an asset manager Janus Henderson report, dividends have increased after the pandemic in 2020 with predictions of further increases.
Moreover, long-term dividend investors can take advantage of companies shelling out cash to their investors on a monthly basis, the two above should be on their watch lists.
Read also: Interested in REITs that pay monthly dividends? Here is a list of five stocks that pay dividends monthly.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
Source: https://finbold.com/two-moderate-buy-reits-that-pay-monthly-dividends/