Earn a Monthly Income with a 13.1% Annual Yield
Monthly Dividend Stock with a Huge Payout
In the current stock market, most dividend-paying companies distribute on a quarterly basis. But for investors who rely on dividend income to cover their day-to-day expenses, getting a dividend check in the mail every three months may not be frequent enough. Fortunately, there is a small group of companies that pay dividends every month.
And when it comes to offering investors a monthly income stream, few companies are more generous than Global Net Lease Inc (NYSE:GNL).
Headquartered in New York City, Global Net Lease is a real estate investment trust (REIT) that owns and acquires global commercial properties. The company focuses on sale-leaseback transactions involving single-tenant, mission-critical income properties located across the U.S. and Western and Northern Europe.
As of September 30, 2017, Global Net Lease’s portfolio consists of 313 properties totaling 22.3 million square feet. Since tenants have to pay rent every month, the company can generate a stable stream of monthly rental revenue. (Source: “November 2017 Investor Presentation,” Global Net Lease Inc, last accessed February 21, 2018.)
And as the name suggests, the company rents out its properties through net lease agreements, meaning the tenants are responsible for property taxes, maintenance, and insurance on the leased properties. This allows GNL to keep more of its rental income, which can then be returned to shareholders in the form of dividends.
Global Net Lease pays monthly dividends of $0.177 per share, which, at the current share price, gives GNL stock a staggering annual yield of 13.1%.
Of course, in today’s market, an ultra-high yield could simply be a sign of trouble. But in the case of Global Net Lease Inc, the company’s generous payout is actually backed by a solid business.
You see, when commercial tenants rent GNL’s properties, they don’t just sign a one-year lease. In fact, by the end of the third quarter of 2017, the company’s portfolio was 99.4% leased with an average remaining lease term of 9.1 years. (Source: “Global Net Lease Announces Operating Results For Third Quarter 2017,” Global Net Lease Inc, November 6, 2017.)
In other words, the company is well-positioned to keep collecting a stable stream of monthly rental income.
Moreover, the properties are leased to a wide range of commercial tenants. As of September 30, 2017, Global Net Lease had 95 tenants coming from 40 different industries. And more than 75% of these tenants have investment-grade ratings. With no single tenant contributing more than five percent of its annual rental revenue, GNL ensures that if one tenant has trouble paying its rent, it wouldn’t do too much damage to company-level financials.
At the same time, the portfolio is well diversified geographically. While most REITs focus on the U.S., Global Net Lease also owns properties in the U.K., the Netherlands, Germany, Finland, France, and Luxembourg. So for investors interested in owning global real estate, GNL stock would provide a convenience way to get some international exposure.
Ultimately, there are other solid businesses with monthly dividend policies. But in today’s market, GNL stock’s 13.1% dividend yield is just too hard to pass up.