Income investors are on the prowl for yield in this market – and real estate investment trusts (REITs) can offer an attractive, reliable income stream, especially those that pay dividends on a monthly basis. The REIT sector has been generous with dividend increases so far this year, with 8 REITs announcing payout hikes last month alone, according to data from S&P Global Market Intelligence.

For investors seeking regular income payments, three REITs that recently raised their monthly dividends and are top-rated by analysts include EPR Properties (EPR), Whitestone REIT (WSR), and Realty Income Corp (O). Let’s explore why these three monthly dividend payers are compelling picks right now, taking a closer look at their latest results, valuation, and what analysts are forecasting next.

Monthly Dividend Stock #1: EPR Properties (EPR)

EPR Properties (EPR) is a unique REIT focused on owning and leasing out experiential properties across the entertainment, recreation, and education sectors. It pays dividends monthly instead of quarterly, providing more frequent income. 

EPR most recently hiked its monthly dividend by 3.6% to $0.285 per share, equating to an annualized $3.42 payout. With shares currently around $41, that’s an attractive 8.3% dividend yield – well above the REIT industry median.

EPR stock is down 15% YTD, lagging the broader market. In comparison, the S&P 500 Index ($SPX) has gained 7.3% year-to-date, outperforming EPR’s negative returns. The REIT’s underperformance can be partly attributed to broader interest rate impacts on the sector.

In its Q4 2023 earnings, EPR reported funds from operations (FFO) of $1.18 per diluted share, on an adjusted basis, in line with estimates. For full-year 2023, FFO came in at $5.18 per share, up from $4.69 in 2022. 

Looking ahead, EPR will release its Q1 2024 results this Wednesday, May 1, after the market close. Analysts forecast EPR to report Q1 2024 FFO of $1.10 on revenues of $148 million. 

EPR currently trades at around 8x adjusted FFO, which is not too pricey for a REIT. The analyst views lean positive – out of 11 in coverage, there are 3 “Strong Buys,” 1 “Buy,” 6 “Holds,” and 1 “Strong Sell.” Their $46.95 mean price target implies around 14% upside potential from current levels.

Monthly Dividend Stock #2: Whitestone REIT (WSR)

Whitestone REIT (WSR) is a community-focused REIT that owns open-air retail centers in high-growth Sunbelt markets like Phoenix, Austin, Dallas-Fort Worth, Houston, and San Antonio. It focuses on convenience properties with a mix of service tenants providing food, healthcare, financial services, education, and entertainment. 

The REIT pays monthly dividends, and recently hiked the payout by 3% to $0.041 per share, or $0.50 annualized. At its current share price, that’s an attractive 4.35% dividend yield.

WSR stock is up 28% over the past 52 weeks, though the shares have pulled back a little more than 6% in 2024.

In Q4 2023, WSR’s FFO of $0.22 per share matched estimates. Revenue for the quarter checked in at $37.5 million, narrowly ahead of the consensus. 

Whitestone is slated to report Q1 results this Wednesday, May 1. Wall Street is looking for FFO of $0.24 per share, unchanged from the year-ago quarter. Priced at 11.3x forward FFO, WSR seems fairly valued.

On the growth front, Whitestone recently announced the $22.2 million acquisition of Scottsdale Commons in Arizona as part of its capital recycling program aimed at improving overall portfolio quality. The acquisition was described as “accretive on day one” for the REIT.

Analyst views are positive on WSR. Out of five in coverage, there are 3 “Strong Buys,” 2 “Buys,” and 1 “Hold” rating. The $14.25 mean price target implies around 24% upside potential.

Monthly Dividend Stock #3: Realty Income (O)

Realty Income Corp (O), dubbed “The Monthly Dividend Company,” is a REIT that owns and operates freestanding, single-tenant commercial properties leased to leading retail companies. They focus on acquiring industry leader properties with strong credit ratings under long-term net leases.

O has an impressive monthly dividend track record. The company has paid over 600 consecutive monthly dividends and increased the payout 109 times since its 1994 NYSE listing. Realty Income is a Dividend Aristocrat, raising its dividend for over 25 straight years at around 4.4% annually. The current $0.257 monthly dividend equates to an annualized $3.084 payout and yields approximately 5.73% at the current price.

Realty Income stock is off 5.4% YTD, though the shares have rallied about 20% off their October lows.  

Earlier this year, Realty Income closed on its previously announced merger with Spirit Realty Capital in an all-stock deal. The combined company creates a larger, more diversified REIT.

In Q4 2023, O reported funds from operations (FFO) of $1.01 per share, narrowly missing the $1.02 estimate, even as revenue of $1.08 billion surpassed forecasts. Full-year 2023 FFO was $4.04, up from $3.99 in 2022. 

When O reports Q1 on May 6, analysts expect FFO of $1.03 per share on $1.16 billion in revenue, and full-year 2024 FFO of $4.16, up 4% year-over-year. At 12.89x forward FFO, Realty Income seems reasonably valued right now.

Analysts are bullish. With 19 in coverage, there are 7 “Strong Buys,” 1 “Buy,” and 10 “Holds.” The $61.23 mean price target implies around 12.7% upside potential.

While the real estate industry still faces challenges, that eventual Fed pivot should give these stocks plenty of relief – and EPR Properties, Whitestone REIT, and Realty Income Corp are shining examples of REITs that not only offer regular monthly dividends, but grow them, too. If you’re looking to bolster your portfolio with some high-yield, reliable dividend payers, these three are worth another look.

On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.