Exploring High-Return Monthly Dividend Stocks: Comparison Between Realty Income and LTC Properties
Title: Choosing Between High Yield REITs: LTC Properties and Realty Income
LTC Properties (LTC) and Realty Income (O) are two real estate investment trusts (REITs) that offer investors a monthly dividend payout. Both have impressive dividend records, but which one is the better high yield choice for income-focused investors? Let's dive into the specifics of these two top-notch REITs.
What Sets LTC Properties Apart?
LTC Properties, known for its focus on long-term care, operates primarily in senior housing and skilled nursing facilities. While LTC has a relatively smaller market cap compared to its peers, it has demonstrated remarkable resilience during the coronavirus pandemic, maintaining its monthly dividend of $0.19 per share ($0.57 quarterly) since 2016.
The Unmatched Performance of Realty Income
Realty Income, a net-lease REIT, stands out for its 30-year streak of increasing dividends and its large market cap of $47 billion. Boasting over 6,500 properties spread across various sectors, Realty Income offers a diverse portfolio providing predictable cash flows and stable dividends paid monthly, like LTC Properties.
Weighing the Yields
The yield difference between the two REITs is notable, with LTC Properties delivering a higher yield of 6.7%, compared to Realty Income's 5.8%. Choosing a REIT based on initial yield may be a sound approach for income-focused investors, as LTC Properties yields over 1% more per year.
Considering Dividend Growth
While LTC Properties offers a higher initial yield, Realty Income's dividend growth offers potential capital appreciation opportunities. Realty Income's dividend has grown nearly 40% over the past decade, far surpassing the growth seen in LTC Properties, which has increased by just over 10%. However, LTC Properties' dividend has remained stagnant since 2017, despite the challenges posed by the coronavirus pandemic.
Making Your Monthly Dividend Decision
If dividend growth is your primary concern, Realty Income may be the better choice. Its impressive dividend growth history presents potential for a higher income yield in the future. However, if maximizing immediate income is your priority, LTC Properties' higher yield could be more appealing. Ultimately, the choice between these two high yield REITs depends on your investment goals, time horizon, and risk tolerance.
- For investors interested in the healthcare sector, LTC Properties' focus on long-term care, operating primarily in senior housing and skilled nursing facilities, might make it an interesting addition to their finance portfolio.
- The smaller market cap of LTC Properties compared to Realty Income might perceived as a disadvantage, but its steady performance during the coronavirus pandemic, maintaining its monthly dividend, has been an interesting demonstration of its resilience.
- Realty Income's net-lease structure and diversified portfolio, with over 6,500 properties spread across various sectors, offer investors an interesting opportunity for predictable cash flows and stable dividends paid monthly, similar to LTC Properties.
- The decision between investing in LTC Properties or Realty Income could be based on financial goals, as LTC Properties yields higher dividends at the moment, while Realty Income's long-term dividend growth history provides potential for higher yield growth in the future, making it an interesting prospect for income-focused investors.
