This 8.3% Dividend Stock Pays Cash Every Single Month

This high-yielding REIT is worth a look by investors seeking monthly income.

Amy Legate-Wolfe ❯

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest.

Published October 4, 2024 4:30 pm EDT

When hunting for monthly dividend stocks, some of the best sectors to explore are real estate investment trusts (REITs), utilities, and financial services. REITs often pay monthly because they collect regular rent, making them a go-to for steady income. Utilities, with their stable cash flow from essential services, are another solid bet for monthly payouts. Lastly, financial services companies, especially those in asset management or lending, can offer consistent dividends due to their recurring revenues. Keep an eye on these sectors if you’re after that reliable monthly cash flow! And this essential REIT could be perfect.

Slate Grocery

Slate Grocery REIT (TSX:SGR.UN) could be a strong option to consider if you’re looking for a stable, income-generating investment. With a focus on grocery-anchored retail properties in the U.S., it taps into a sector that remains resilient even during economic downturns. After all, people need to buy food no matter what, right? This makes their properties attractive to tenants, translating to a consistent stream of rental income and, of course, those reliable monthly dividends investors love. Plus, the REIT’s strategy of targeting high-quality, well-located properties strengthens its long-term growth prospects.

What really sets Slate Grocery REIT apart is its smart diversification and steady track record. It operates across various regions, reducing the risk of localized economic slumps affecting their entire portfolio. On top of that, its properties are anchored by major grocery chains. And these tend to have long-term leases, providing a sense of security to income-focused investors. So, if you’re after monthly dividends with a side of stability, Slate Grocery REIT could be just the ticket!

Onto earnings

Slate Grocery REIT’s most recent earnings for Q2 2024 reflect stable and resilient performance in the grocery-anchored retail sector. The REIT reported rental revenue of $51.8 million, a slight increase from the previous year. While the revenue remained stable, Slate Grocery’s focus on long-term, grocery-anchored properties continues to offer predictable cash flows. The portfolio benefits from strong occupancy rates, driven by the essential nature of grocery shopping, ensuring steady tenant demand.

Another key takeaway from the earnings is the REIT’s solid net operating income (NOI), which increased to $41.4 million in Q2 2024, up from $40.3 million in Q2 2023. This performance, coupled with a reliable monthly dividend, makes Slate Grocery REIT an appealing option for income-focused investors. The REIT’s management has highlighted their commitment to maintaining a strong balance sheet and disciplined approach to growth, thereby reinforcing their ability to deliver long-term value to investors.

Should you buy?

Slate Grocery presents a solid option for income investors, with a forward annual dividend yield of 8.3%. This high yield is attractive, especially for those seeking consistent monthly income. Plus, its market cap of $831.4 million shows that it’s a mid-sized REIT, providing a balance between stability and growth potential. The company’s focus on grocery-anchored real estate, a sector known for its resilience during economic downturns, adds to its appeal. However, its payout ratio is quite high at 153%, which means a significant portion of its earnings is being distributed to investors as dividends – a factor to watch for sustainability.

In terms of recent performance, Slate Grocery REIT reported a slight dip in revenue growth year-over-year, with revenue totalling $209.1 million over the last 12 months. While quarterly earnings saw a decline at 26%, the REIT maintains a strong operating margin of 75.7%, indicating effective cost management. The total debt is significant at $1.2 billion, resulting in a higher debt-to-equity ratio of 133.4%, which could pose risks if interest rates rise. Despite this, the REIT’s strong cash flow, with operating cash flow at $71 million, provides some reassurance for dividend investors. So if you’re looking for income every month, long term, consider this REIT today.