U.S. REITs: Longest Dividend Paying Stocks – WPC

logoWhen it comes to concentrating on yields, there have been excellent figures reported from the diversified sector. With a 6.3 percent median yield, this sector leads our dividend yield ranking. Among those, W. P. Carey (NYSE:WPC) has had a particularly good track record of providing steady and gently increasing dividends.

Since 1998, WPC has seen some great marks in terms of distributing dividends in every single quarter. In addition, they have never reduced any dividends, especially during the latest recession. Their current dividend yield is 6.4 percent — in line with the sector median — and a 73 percent dividend payout.

Furthermore, WPC’s funds from operations (FFO) and Adjusted FFO have increased significantly, besides assets and occupancy rates being $9 billion and 99 percent respectively. The average nine-year lease term helps make the case for long-term cash flows, though it may prove problematic in a likely rising interest rate environment.

lease exp

Although WPC leases properties on a triple-net lease basis (tenants pay operating and maintenance expenses), it has been difficult to evaluate the company as there is no really direct comparison. They are present in many diverse sectors, none predominant, and are seeing exposure in various international markets.

Finally, because of partly external management, some decisions about obtaining fees instead of defending shareholders’ interests may be skewed. Though most debt is fixed-rate, WPC’s total debt-to-enterprise value has been recorded at just above 40% — on the relatively higher side.

In summary, if you are interested in dividends, this may not be a bad overall decision, thanks to an excellent track record and robust Q2 figures. This may not necessarily be the best available REIT stock, but it does have its advantages because the company management constantly strives to pay the steadiest possible dividends.

Source: W. P. Carey, Fast Graphs

Disclaimer: This newsletter is not engaged in rendering tax, accounting, or other professional advice through this publication. No statement in this issue is to be construed as a recommendation to buy or sell any security or other investment. Please do your own due diligence before making any investment decision. Some information presented in this publication has been obtained from third-party sources considered to be reliable. Sources are not required to make representations as to the accuracy of the information, however, and consequently the publisher cannot guarantee accuracy.

Disclosure: The author has no positions in any shares mentioned, and no plans to initiate any positions within the next 72 hours.

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