The Other Apple Stock That Pays A Monthly Dividend With A 5.7% Yield

Apple Inc. AAPL, the world's most valuable company in terms of market capitalization, is an investor-favorite stock. As the tech sector rebounded this year after a brutal rout, Apple has been one of the best-performing large-cap stocks, gaining nearly 50% year-to-date. 

Legendary investor Warren Buffett called Apple one of his "crown jewels," claiming it is a "better business than any we own." Approximately 48% of Berkshire Hathaway Inc.'s total portfolio is in Apple stock, valued at well over $176 million as of Sept. 30.

The Magnificient Seven stock isn't the only Apple you should consider investing in. Apple Hospitality REIT Inc. APLE is one of the most popular hospitality real estate investment trusts (REITs) in the country, owning one of the largest portfolios of upscale hotels in the U.S. Apple Hospitality's portfolio comprises 224 hotels, including popular chains such as Hilton, Hyatt and Marriott. 

Apple Hospitality pays $0.96 per share in dividends annually (distributed monthly), yielding 5.64% on the current price. The REIT has a four-year average dividend yield of 4.05%. Apple Hospitality also has raised its dividends by over 57% over the trailing 12 months. 

In comparison, the tech behemoth, which also pays $0.96 in dividends annually, yields only 0.48% on its current stock price. 

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Strong Financials 

With the travel and hospitality sector rebounding amid strong pent-up demand, Apple Hospitality's financials have improved substantially in recent quarters. The REIT's comparable hotel revenue per available room (RevPAR) has risen 7% since the third quarter of 2019, as of the quarter ended Sept. 30. This marks the highest quarterly growth since the COVID-19 pandemic. 

The hospitality REIT's adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose by 2.6% year over year to $118.9 million in the last quarter while operating income increased 1.2% from the same period last year to $75.41 million. 

“Our strategy of investing in a broadly diversified portfolio of high-quality, rooms-focused hotels with low leverage has been tested across economic cycles and consistently yielded compelling results for our investors. Our outperformance since the onset of the pandemic has enabled us to maintain the strength and flexibility of our balance sheet, positioning us to be acquisitive within the current transaction environment," Apple Hospitality CEO Justin Knight said. "Through strategic asset management, our efficient operating model and continued strength in ADR [average daily rate], we were able to achieve strong margins during the quarter, despite continued inflationary and wage pressures."

Business Expansion And Growth Prospects 

Apple Hospitality acquired five hotels for about $178 million in the first nine months of 2023. The REIT also has three hotels under contract and is expected to close by 2025. 

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Analysts expect Apple Hospitality's annual revenue to amount to $1.33 billion in fiscal 2023, reflecting a 7.7% year-over-year increase. The consensus earnings-per-share estimate of $0.78 for the current year indicates a 5.4% year-over-year increase. The REIT stated in its third-quarter earnings report that it expects its comparable hotels’ RevPAR to rise in the range of 5.5% to 7.5% in the current year. At the same time, annual net income is forecasted to range between $167 million to $189 million. 

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