O Stock: The Most Reliable Way to Earn Monthly Income from Stocks?
1 Monthly Dividend Stock for 2017 and Beyond
Monthly dividend stocks are some of the best creations for income investors. With dividend checks arriving in the mail every month, it’s much easier to budget expenses, especially for retirement investors. Here we’re going to take a look at perhaps the most reliable monthly dividend stock in the current market: Realty Income Corp (NYSE:O).
Headquartered in San Diego, California, Realty Income Corp is in the real estate business. Structured as a real estate investment trust (REIT), the company acquires freestanding, single-tenant properties and leases them to commercial businesses. Right now, the company’s portfolio consists of more than 5,000 commercial properties spread across 49 states and Puerto Rico.
There are a few dozen monthly dividend companies trading in the U.S. stock market. But when it comes to paying a reliable stream of dividends, no one even comes close to Realty Income Corp.
The company was founded in 1969. Since then, it has made 565 consecutive monthly dividend payments. In 1994, Realty Income Corp started trading on the New York Stock Exchange (NYSE) and quickly established itself as one of the most solid monthly dividend stocks.
Right now, the company pays $0.2115 per share on a monthly basis, giving the stock an annual dividend yield of 4.36%.
However, a handsome yield is not what makes Realty Income Corp stand out. The number-one reason to consider this monthly dividend stock is its reliable payout.
You see, since the company’s initial public offering (IPO), it has raised its payout a total of 92 times. Now, note that Realty Income Corp has only been a publicly traded company for 24 years, so it was raising its payout multiple times a year. In fact, the most recent 79 dividend hikes were consecutive quarterly increases. (Source: “Dividend Payment Information,” Realty Income Corp, last accessed August 24, 2017.)
In other words, for nearly two decades, Realty Income Corp investors have been collecting bigger monthly dividend checks every three months.
A Business That Generates Steady Cash Flows
The reason why the company can pay such reliable dividends is its rock-solid business. Realty Income Corp is a giant landlord and, since tenants have to pay rent on a monthly basis, the company generates a steady stream of cash flow, which can then be distributed to shareholders.
And if you are concerned that some tenants may not pay on time, don’t worry. Realty Income Corp’s properties are leased to high-quality commercial tenants through long-term agreements. In fact, approximately 46% of the company’s annualized rental revenue comes from investment-grade-rated tenants.
The portfolio is also diversified. Realty Income Corp’s 5,028 properties are leased to 250 commercial tenants representing 47 different industries. So, if a particular tenant is not doing well, it likely won’t result in much damage to the whole company’s financials.
Indeed, as the company’s track record shows, it was able to steadily increase its dividends despite all the ups and downs in the economy over the last two decades.
For investors relying on portfolio income to cover day-do-day expenses, few companies can do a better job than Realty Income Corp. With a reliable and increasing stream of dividends, it is a top monthly income stock to own for 2017 and beyond.