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Dividend investing often takes a back seat as the market focuses on technology growth stocks, especially with AI driving much of the market hype. But the hype won’t last long and long-term investors should favor solid income-producing stocks for good times and dry spells. The performance of dividend stocks is best understood over the longer term. Dividends and reinvested dividends have accounted for about 60% of the S&P 500’s total returns over the past four decades through 2022, according to a report from Richard C. Young Investment Advisors.
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A few months ago, a dividend investor shared his detailed income report on the r/Dividends community on Reddit, saying he earns about $5,300 per month in dividend income. According to the portfolio screenshots shared by the investor, his total portfolio was worth approximately $880,368. He said it took about a year to go from $4,000 to $5,300 in monthly dividend income.
Someone asked the investor how he chose dividend stocks to invest. This is what he said:
‘Primarily the following:
Is the return higher than 3%?
Is the dividend growth at least more than 3-4% to keep up with inflation?
What is the stock price over the past five years? Up, down or plateau?
Is the brand strength strong?
Is this what the majority of people need? (Such as EPD or ENB, where almost everyone needs energy.)”
The investor was also asked to share his advice for aspiring investors.
“If you’re not sure where to start, I always recommend starting with VOO and QQQM. You can’t go wrong with these two combinations. Give yourself some time to look at the market and start investing in individual shares.”
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Arbor Realty Trust
Arbor Realty Trust Inc. (NYSE:ABR) was among the investor’s largest holdings, earning $5,300 per month in dividends. The portfolio screenshots showed he owned 2,020 shares of the company, raking in $3,650 annually. Arbor Realty is a mortgage REIT with a dividend yield of over 11%.
Reliance on medical properties
Medical Properties Trust Inc. (NYSE:MPW) is a healthcare-focused REIT that acquires and develops net-leased hospital facilities. It is among the best high-yield REITs in the investor’s portfolio, earning $5,300 per month in dividend income. MPW has a return of over 6.5%. Shares of MPW are up 5% so far this year.
The Redditor had approximately 6,437 shares of Medical Properties Trust in his portfolio, generating $3,862 in annual dividend income.
Real estate income
Realty Income was among the Redditor’s largest holdings, earning $5,300 per month in dividends. He owned approximately 829 shares of the monthly dividend stock. Realty Income yields more than 5% and has raised dividends for 30 years in a row. Analysts believe Realty Income Corp (NYSE:O) has better days ahead as its tenants include retailers who will see more foot traffic amid a drop in inflation and interest rate cuts. Earlier this month, Mizuho Securities reaffirmed its Outperform rating on the stock with a price target of $64.
Deer Industrial Stag Industrial (NYSE:STAG) is an industrial REIT that pays monthly dividends. The dividend yield is approximately 3.8%. The stocks made up a negligible portion of the Redditor’s portfolio. STAG shares are up 14% so far this year.
VICI properties
VICI Properties Inc. (NYSE:VICI) was another high-yield REIT stock in the investor’s portfolio, earning $5,300 per month in dividend income. New York-based VICI Properties Inc. (NYSE:VICI) is a real estate investment trust focused on casinos, entertainment and hospitality facilities. The company owns some of the world’s most famous entertainment venues, including Caesars Palace Las Vegas, MGM Grand and the Venetian Resort Las Vegas. VICI has a dividend yield of approximately 5.2%.
With a dividend yield of 5.8%, WP Carey Inc (NYSE:WPC) is among the top net lease REITs with more than 1,200 properties in the US, Europe and other parts of the world. Retailers, restaurants, car companies and supermarkets are among the REIT’s tenants. The Redditor who earned $5,300 a month in dividend income only had 126 shares of the company in his portfolio.
The current interest rate environment has created incredible opportunities for income-seeking investors to earn huge returns, but not through publicly traded REITs.
Arrivald Homes, the Jeff Bezos-backed investment platform, has launched its Private Credit Fund, which provides access to a pool of short-term loans backed by residential real estate with a net annual return of 7% to 9% paid out monthly to investors. In August it paid 8.1%. The best part? Unlike other private credit funds, this one has a minimum investment of just $100.
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Wondering if your investments could earn you a $5,000,000 nest egg? Talk to a financial advisor today. SmartAsset’s free tool matches you with up to three vetted financial advisors serving your region, and you can interview your advisors for free to decide which one is right for you.
This article Dividend Investor Making $5,300 a Month Shares His Portfolio: The Top 6 High-Yield REIT Stocks You Can’t Miss originally appeared on Benzinga.com
