may know, when it comes to stocks, I’m partial to dividend payers.
then only making money by selling your stocks to someone else at a
higher price than you paid, dividend stocks actually pay you just to
own them. Dividend yield tells you how much they
Dividend yield is similar to the interest rate that you earn from a
savings or money market account. It’s the total dividends you expect
to receive over 12-months expressed as
a percentage of the price you paid for the shares. For instance,
your yield would be 10% if you paid $20 per share for a stock paying
$2.00 per share annually.
About Real Estate Investment
The dividend payer that I’m going to describe today
is a real estate investment trust (REIT). REITs are corporations
that invest mainly in real estate and don’t pay federal income taxes
as long as they pay out at least 90% of their income to
shareholders. Consequently, REITs pay relatively high dividends
compared to most stocks.
Realty (GTY), is a REIT that owns gas station, car wash, and
convenience store properties that it leases to third-party operators
on a triple-net basis, which means that tenants pay all
As of September 30, Getty owned 896 properties and
leased 58 properties from third-party landlords in 35 states across
the United States and Washington, D.C.
Getty has been around for
some time, but recently started an active acquisition program
intended to grow revenues and earnings. How serious is Getty about
this program. So far this year, Getty
has paid $140 million to acquire 32 properties. And it’s starting to
Even though pandemic-related issues
squashed results, September quarter revenues
still rose 4% vs. year-ago to $37.9
million. Funds from operations, a cash flow measure typically used
to evaluate REITs, rose 9% to $0.48 per share.
Reflecting its strong performance, on October 21, Getty hiked its
quarterly dividend by 5% to $0.39 per share, bringing its dividend
yield up to 5.5%.
all the good news, Getty is relatively unloved. Only two of the five
analysts covering the REIT are advising buying. The remaining three
are all at “hold,” which most market players understand means
“sell.” If Getty’s acquisition program continues to be successful,
eventually these analysts will notice and upgrade Getty to ‘buy,’
which will bring the stock to the attention of more market players.
analysis is correct, there’s plenty of upside potential here, and
you’ll get pay a hefty dividend while you’re waiting.