Dividend Stocks

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>>> Realty Income


http://m.kiplinger.com/article/investing/T044-C008-S003-5-reits-to-buy-now-for-income-and-growth.html



Most REITs pay quarterly dividends, but Realty (O, $64.30, P/E 22, 3.5%) shells out cash monthly, paying about 20 cents per share like clockwork. That income arises from Realty’s vast collection of properties: 4,615 buildings, leased mainly to big retailers such as Walgreens and Dollar General. These firms sign long-term triple-net, or NNN, leases with Realty, requiring them to pay for all property taxes, maintenance and insurance.

Although Realty isn’t a high-growth REIT, it’s a solid earner. The firm has paid dividends for a stunning 550 consecutive months. Its 98% property occupancy rate has never slipped below 96%, and revenues are climbing thanks to rent increases built into leases and a steady stream of property acquisitions. Realty expects FFO to rise by as much as 4.3% this year. That should support more growth in the dividend, which Realty has increased at an annualized rate of 4.7% since going public in 1994.

At 22 times FFO, Realty is one of the pricier REITs, and its stock may stay flat in the near term. But stick with it: You can scoop up steady monthly dividends while waiting for the shares to edge higher over the long run.

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