Investors are always delighted when a stock in their portfolio announces a dividend increase. For income investors, it means a monthly or quarterly raise.
For investors more concerned with growth, dividend hikes often mean more than just a rise in income. Dividend increases can portend an increase in future earnings as well because the earnings need to cover the dividends being paid to shareholders. As earnings increase, share price appreciation often follows.
Most real estate investment trusts (REITs) are expected to announce second-quarter earnings within the next three weeks. Investors may be able to pick up clues as to which companies will report good results by watching to see which are raising dividends.
Take a look at several REITs that have announced dividend hikes this month.
NNN REIT Inc. NNN is an Orlando, Florida-based triple-net-lease REIT that owns a diversified group of stand-alone retail outlets across the U.S. NNN REIT has a stable tenant base, with names like 7-Eleven, Sunoco, Best Buy, Camping World, BJ's Wholesale Club and Chuck E. Cheese.
On June 28, Janney Montgomery Scott analyst Robert Stevenson upgraded NNN REIT from Neutral to Buy and set a price target of $48.
On July 14, NNN REIT increased its quarterly dividend 2.7% from $0.55 to $0.565 per share. The present yield on its $2.26 forward annual dividend is 5.3%.
NNN REIT will pay its quarterly dividend of $0.565 on Aug. 15 to shareholders of record as of July 31. The ex-dividend date is July 28.
This is the fifth time that NNN REIT has increased its dividend since July 2020. When a company continually raises its dividend, it's usually a strong sign of improving earnings and revenue, along with continued faith in its future.
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Gladstone Land Corp. LAND is a McLean, Virginia-based specialty REIT that focuses on acquiring and owning farmland and farm-related properties in 15 major agricultural states across the U.S. It owns farms but also contracts with tenants on farmland purchase-leasebacks. As of early May, Gladstone owned 169 farms totaling approximately 116,000 acres. It has a 100% occupancy rate with 88 tenants with weighted-average remaining lease terms of 6.5 years.
On June 27, Gladstone Land announced it completed the sale of an unfarmed property in Florida for $9.6 million, providing a 343% return on investment, with a capital gain of approximately $6.4 million.
On July 12, Gladstone Land increased its monthly dividend from $0.0460 to $0.0462. The annual dividend of $0.5544 presently yields 3.27%. Gladstone Land will pay its quarterly dividend on July 31 to shareholders as of July 21. The ex-dividend date is July 20.
Gladstone Land will release its second-quarter earnings on Aug. 7 after the market closes.
Necessity Retail REIT Inc. RTL is a New York-based retail REIT that owns and operates 1,039 properties in 48 states. About 90% of its properties are single-tenant assets and about 10% are open-air shopping centers with multiples. Necessity Retail was founded in 2013.
On May 23, Global Net Lease Inc. GNL announced it would acquire Necessity Retail REIT in an all-stock transaction of approximately $950 million. Necessity Retail shareholders will receive 0.67 shares of Global Net Lease stock for each common share of Necessity Retail stock. The merger will close in the third quarter.
On July 3, Necessity Retail announced it was increasing its quarterly dividend from $0.2125 to $0.2130. The quarterly dividend was paid on July 17 to shareholders of record as of July 13.
Necessity Retail will announce its second-quarter operating results on Aug. 2 after the close of trading.
Whitestone REIT WSR is a Houston-based retail REIT that owns, operates and develops open-air retail centers in fast-growing Sun Belt markets. Whitestone owns 50 properties in Texas and Arizona and one in Illinois. Whitestone's tenants are mostly service-oriented businesses, such as restaurants, health and fitness centers, financial services and grocery stores.
Truist Securities rates Whitestone REIT a Hold, with a $10 price target. EF Hutton has a Buy rating on Whitestone REIT and a $13 price target.
On July 3, Whitestone REIT announced it is increasing its monthly dividend from $0.035 to $0.04. Whitestone paid its quarterly dividend on July 11.
Whitestone REIT will release its second-quarter financial results on Aug. 1 after the markets close.
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