Wow, the stock market has almost broken even for the year. With how much January was down, I did not expect it this soon. With the market going up, my strategy of buying stocks that make the best value is much harder now. In fact, my last purchase was only 13 days ago. This is the longest stretch in a while. However, with all of my purchases this year, pausing for a couple weeks probably makes sense. At the very least, it is what I did. Now let’s continue to manufacture and distribute dividends.
Over the last few days, I have been reading up on companies that pay monthly dividends. Unfortunately, not many companies pay monthly dividends. Most pay quarterly, or 4 times per year. I imagine it gives a company better cash flow control and less paperwork to fill out to pay less often. The main companies that do pay monthly dividends are REITs. The others that do are ETF’S or other companies that break our rules of investing, which mainly violate our rule of not wanting K1 tax forms.
We want another company that pays monthly dividends because it will help with the positive feedback loops of why we are investing, dividends. By having a couple companies pay monthly dividends, we will see the fruits of our labor more often. The amount of dividends will be the same. If a company pays $1 per month, or $3 per quarter, it still comes out to $12 per year. Investing in a company that pays monthly dividends is not of enough of a reason to invest. If they cut their dividends completely, $0 a year is still $0 even if they give you $0 every day. It turns out you cannot make up $0 in volume. They can also switch their payments to quarterly.
After reading around, we have decided to choose STAG Industrial (STAG). They own single tenant industrial properties, think manufacturing and distribution properties. As a small company, with a 1.3 billion market cap. They own 218 properties. Their IPO was in 2011, making them a relatively new stock to invest in.
Manufacture and Distribute Dividends
STAG Industrial (STAG) has a dividend growth rate of 4.5% and have been growing as a company 18% YOY (year over year). The industrial property market is $1 trillion, and they have a target market of over $250 billion that fits their market. If they achieve that, they will grow by 100 times. That will turn a $300 investment into $30,000. However, 100% of the market is not realistic. But even 10 times growth would still be awesome. While that would be awesome, it comes with added risk, such as their small market cap and being new.
Being so new, they have a small track record of dividends so far. They have only been paying an increasing dividend since 2011. They do pay a monthly dividend with a 7.3% yield. With the added risk, we have the opportunity to make a lot of dividends.
What we Bought
We bought 15 shares of STAG Industrial (STAG) for $291.79, including those industrial dividends. We will start earning $20.85 a year, or $1.74 a month. This distribution will help give us additional feedback monthly with added funds into our account.
How do you manufacture and distribute dividends? Please share in the comment section below.
Disclosure: STAG – We own shares.