Saturday, May 14, 2011

REITs that Pay Dividends Monthly

I personally think that real estate has bottomed out, with the possible exception of high end single family residences. An optimal way to invest in real estate, if you think the turn-around has started, is through Real Estate Investment Trusts, also known as REITs. Almost all the income from REITs is passed through to investors to avoid double taxation, at the corporate level and at the shareholder level.

Fortunately, there are plenty of REIT specialties to choose from, including apartments, commercial buildings, personal storage units, industrial properties, government buildings, medical buildings, and mortgages.

You can buy and manage your own real estate directly, but then you lose out on many of the benefits of REITs, such as liquidity, professional management, diversification, and not having to deal with plumbing problems in the middle of the night.

Several REITs even pay dividends monthly, according the the list of monthly dividend stocks at Yields range from 3% to more than 6%. The monthly dividends can provide advantages over quarterly dividends, in that the volatility is usually lower, compounding is greater if dividends are reinvested, and capital is returned more quickly.

One monthly dividend paying REIT is Inland Real Estate Corp. (IRC), which offers a yield of about 6.4%, and trades at 10 times forward earnings. This REIT owns and operates shopping centers and single-tenant retail properties in the Midwest. The company has been paying monthly dividends since 2004.

LTC Properties, Inc. (LTC) which sports a yield of 5.8% and trades at a forward PE of 13, is a long-term care real estate investment trust. This is a REIT that pays monthly dividends, and the dividend track record also dates back to 1992.

To see the list of monthly dividend REITs along with other stocks that pay high dividends on a monthly basis, go to The list can be downloaded, sorted, and updated.

Disclosure: Author did not own any of the above at the time the article was written.


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