3 Stocks Boosting Their Dividends In July

| June 12, 2017 | 0 Comments

dividendBuying shares in any of these three stocks now, before they announce their regular dividend increases, gives you a great chance to earn a quick share price jump when the rest of the market hears the news. But, you must act quickly, the first announcement is coming up soon. 

There is a general misconception that rising interest rates are always bad for real estate investment trust ­(REIT) values. However, history shows that REITs have outperformed 75% of the time during the last 16 periods of rising interest rates.

One reason is that quality REITs will grow their dividends, and if the dividend increases keep up or exceed the interest rate increases, you are better off owning the REIT shares.

Buying shares in the month before a dividend announcement is one strategy that can produce a quick start to a new REIT stock investment. Most REITs increase their dividend rate once a year and then pay that new rate for the next four quarters.

Most of the investing world is not aware of the timing of dividend boosts in the REIT world. I maintain a database of about 150 REITs and include which month each company usually announces its dividend hikes. Summer is the one period with the fewest number of increase announcements.

However, it can also be an opportunity because the general market is not looking for higher dividend rate announcements. There are three REITs that should announce higher payouts in July. You can pick up shares now, and, when a new higher dividend is announced, you get the double bonus of a possible share price increase on the news and the guaranteed benefit of a higher yield than the current quoted rate. Here are three stocks to consider buying in June for a July dividend increase.

Select Income REITSelect Income REIT (Nasdaq: SIR) owns 362 buildings, leasable land parcels, and easements containing 44.8 million square feet that are 95.9% leased for a weighted average lease term of 9.9 years. The properties are in 35 states and SIR is the largest owner of industrial property in Hawaii. Revenue growth is generated by built-in rent escalators and the development of raw land industrial properties.

Select Income has steadily increased its dividend since the company’s IPO in early 2012. Last year the dividend was increased by 2.0%. Investors can expect a similar increase this year. The next dividend announcement will be in mid-July, with a record date a week later and payment in mid-August. SIR currently yields 8.5%.

National Retail PropertiesNational Retail Properties, Inc. (NYSE: NNN) is a traditional triple-net lease REIT. The company owns over 2,500 free-standing, single-tenant retail properties. most of the REIT’s tenants are in businesses that cannot be hurt or replaced by online sellers. The top types of businesses are convenience stores, casual and fast food restaurants, auto service shops, fitness outlets, movie theaters and auto parts stores. When acquiring new properties NNN focuses on buying stores with great locations over high-quality tenants.

The good locations mean that the tenants will be successful and be able to pay the rents. Also, if a tenant does leave, it will be easier to re-lease a property in a great location. NNN is a Dividend Aristocrat and has increased its dividend for 27 consecutive years. The current dividend is 67% of FFO. NNN will announce its next dividend boost in mid-July with record date at the end of the month and payment in mid-August. Dividend growth has been about 4% per year and the current yield is 4.8%.

Education Realty TrustEducation Realty Trust, Inc. (NYSE: EDR) develops, acquires, owns and manages collegiate housing communities located near university campuses. Currently, the company owns 66 communities in 40 different university communities. These communities are located 1/10th to 1/3rd of a mile from the campuses.

The college housing business model has produced stable revenue growth, averaging 3.7% per year same-store gains. Development and acquisitions boost that core growth rate. Last year, EDR increased its dividend by 2.7%. FFO growth over the last year points towards the potential for a high single-digit increase this year. EDR will announce its next dividend boost in mid-July with record date at the end of the month and payment in mid-August. The stock currently yields 3.9%.

Note: This article originally appeared at Investors Alley.

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Category: Dividend Stocks To Buy?

About the Author ()

Tim Plaehn is the lead investment research analyst for income and dividend investing at Investors Alley. He is the editor for The Dividend Hunter, an investment advisory delivering income investments with double digit growth in share price and dividend payments, and 30 Day Dividends, a specialty income service that takes advantage of opportunities for relatively fast, attractive profits around potential dividend payouts.

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