Even though the Federal Reserve has raised interest rates from 0.00% to 4.35% over the past year, longer rates on the 10-year and 30-year benchmark bonds have collapsed. In fact, due to the sharp drop, potential homebuyers have seen the biggest decline in mortgage rates in 14 years. The 30-year U.S. mortgage rate has moved from 7.08% to 6.15% over the past 10 weeks. That is the biggest 10-week drop in rates (almost 1%) since January 2009.
While great for potential homebuyers, or those looking to refinance, it is not so great for those looking for dependable dividends. The thought of buying a 30-year bond with a puny 3.63% yield does not make sense for growth and income investors looking for yield. One great idea now, especially with the Fed closing in on the end of the rate hikes, is real estate investment trusts. REITs are a very practical way to own commercial and residential real estate, and many pay among the best dividends of any asset class. However, most only pay quarterly, or four times a year, so there are at least 90 days between dividends.
Since most Americans receive bills that need to be paid monthly, we decided to screen our 24/7 REIT research universe for Buy-rated stocks that pay monthly dividends. We found seven that make sense for income investors looking for dependable distributions and a degree of safety. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Agree Realty
This top REIT has had a nice run off the lows printed earlier this month and still has potential upside. Agree Realty Corp. (NYSE: ADC) focuses on the ownership, development, acquisition and management of retail properties net leased to national tenants. It specializes in acquiring and developing net-leased retail properties for retail tenants.
The company specializes in the acquisition and development of properties net leased to industry-leading, omnichannel retail tenants. As of December 31, 2022, it owned and operated a portfolio of 1,839 properties, located in all 48 continental states and containing approximately 38.1 million square feet of gross leasable area.
Agree Realty stock investors receive a 3.90% distribution. Raymond James has a Strong Buy rating to go with its $81 target price. The consensus target is $77.45, and the stock closed on Thursday at $74.36.
EPR Properties
This REIT invests in some of the most popular entertainment companies and pays one of the biggest monthly dividends. EPR Properties Inc. (NYSE: EPR) is a leading experiential net lease REIT, specializing in select enduring experiential properties in the real estate industry.