Best Monthly Dividend Stocks – American Capital Realty Properties
Dividend Yield: 7.8%
Next on the list of monthly dividend stocks is one of Realty Income’s upstart competitors, American Capital Realty Properties (ARCP).
I call ARCP an “upstart” due to its short trading history (it’s only been trading since 2011). But the truth is, after its merger with Cole Properties (COLE), ARCP will be the largest triple-net REIT by market cap, and its total square footage will be nearly double that of Realty Income. And while ARCP stock has a short history, its executive team has an average of 20 years experience in the industry.
Because of its shorter trading history, this monthly dividend stock trades at a decent-sized discount to Realty Income. Based on its last monthly dividend of 8.33 cents, ARCP is one of the best monthly dividend stocks, yielding 7.8%. That kind of yield is hard to come by these days unless you’re willing to accept some pretty significant risk.
Writing for Barron’s in December, Vito Racanelli suggested that ARCP stock was 20% to 40% undervalued relative to its peers. I would agree, but I would also mention that I consider its peers (such as Realty Income) to be attractively priced as well.
If you’re buying the stock for income, capital appreciation is a secondary concern. Still, no one complains when an income stock (especially one of our monthly dividend stocks) ends up generating high capital gains.