High-yield monthly dividend stocks are convenient for helping you pay the bills. Alternatively, if you don’t currently need the big income, you can use it to reinvest into higher-growth stock opportunities.
Here are three high-yield monthly dividend stocks that you can consider to increase your income right away.
Slate Office REIT (TSX:SOT.UN) is a pure play on office properties. It advertises itself as a value investor with an entrepreneurial culture.
Indeed, it would seem that the real estate investment trust (REIT) has been investing in the right places. Since 2015, Slate Office has generated returns on equity of about 12%. As well, its returns on assets have been stable at about 4% for each of those years.
Slate Office has amassed a 43-asset portfolio across 7.9 million square feet. Its recent results were strong with its Q2 occupancy at 86.8%, which was up 2.4% year over year.
The leases that it made in Q2 was completed at spreads that were on average 9.2% over expiring rents. This is strong proof that Slate Office’s investment strategy of buying quality assets with in-place rents below market has been a success.
At $7.88 per unit as of writing, the stock is trading at the mid-point of its 52-week trading range and offers a 9.52%. Its Q2 funds from operations (FFO) payout ratio was about 95%, which was a huge improvement from Q1’s payout ratio of about 110%.
Slate Retail REIT (TSX:SRT.UN) is a pure play on U.S. grocery-anchored retail real estate, which is a defensive asset. So, not surprisingly, the REIT has maintained a high occupancy rate of about 92% for six consecutive quarters. In the most recently reported quarter, its portfolio occupancy was 93.9%.
Slate Retail’s portfolio is comprised of 87 retail properties across 11 million square feet. Its Q2 FFO payout ratio was about 67%. At $12.70 per unit as of writing, Slate Retail offers a distribution yield of 8.62%.
Firm Capital Property Trust (TSXV:FCD.UN) is a diversified REIT with retail (about 51% of its net operating income), industrial (about 39%), office (about 7%), and multi-residential (about 3%) assets. Notably, about 72% of its net operating income comes from Ontario and roughly 19% comes from Quebec.
Firm Capital Property has a portfolio of 60 properties across almost 1.5 million square feet. Its commercial and multi-residential portfolios’ occupancies were 94.6% and 98.5%, respectively, in Q2.
The REIT has a diversified group of tenants with its largest-five tenants contributing 2-4.7% each to its net rent. Its FFO payout ratio for the first half of the year was 96%. At $6.30 per unit as of writing, Firm Capital Property offers a distribution yield of 7.3%.
Investor takeaway
High payout ratios in REITs are common. However, payout ratios that are close to 100% leave little margin of error.
Investors should consider buying a diversified group of high-yield stocks, such as Slate Office, Slate Retail, and Firm Capital Property to reduce company-specific risks while earning a large income stream.
In the near term, Slate Office and Firm Capital Property should have better growth prospects than Slate Retail.
