Now, when it comes to Real Estate Investment Trusts, or REITs as the financially inclined like to call them, it’s easy to get lost in a thicket of acronyms and yield calculations. It’s a bit like trying to navigate the London Underground – seemingly straightforward at first, then suddenly you’re wondering how you ended up in Tooting Bec. But the basic idea is this: they own buildings, collect rent, and pass a good chunk of that rent along to us, the investors. And some of them, bless their predictable hearts, do it monthly. Two of the most prominent contenders in this monthly dividend arena are Realty Income (O +0.33%) and Healthpeak Properties (DOC +0.00%). Let’s have a look, shall we?
The Steady Eddy: Realty Income
Realty Income is, to put it mildly, a dividend machine. They’ve paid a monthly dividend for, well, an astonishingly long time – 667 consecutive months as of this writing. That’s roughly 55 years of reliably showing up with the goods. They’ve also increased that payment 133 times since 1994. One hundred and thirty-three! It’s enough to make one wonder if they have a dedicated team of dividend-boosting elves tucked away somewhere. Their dividend has grown at a compound annual rate of 4.2% over that period, which is, frankly, quite respectable.
Currently, the yield is a shade over 5%, a bit above the sector average. They’re not building castles in the air, either. Their portfolio is impressively diversified – 15,400 properties spanning retail, industrial, gaming… you name it. And they’re secured by long-term leases, which is a bit like having a tenant who signed a contract in hieroglyphics – remarkably stable. Crucially, they only pay out about 75% of their income as dividends, keeping the rest to reinvest. And they have a balance sheet that would make most banks envious. It all adds up to a very secure, if slightly predictable, income stream.
They’re investing heavily, too – over $6 billion last year. Apparently, there’s $14 trillion worth of real estate out there suitable for these “net leases.” That’s a lot of buildings. Enough to make one feel rather small.
The Up-and-Comer: Healthpeak Properties
Healthpeak Properties is a bit of a latecomer to the monthly dividend party, switching over last April. They’ve also given their payment a small boost, a 1.7% increase, though it was preceded by a rather significant reduction in 2020. Their current yield is a more robust 6.8%, which is certainly eye-catching.
Healthpeak focuses on healthcare properties – over 700 of them, including outpatient medical centers, labs, and senior housing. They lease these to high-quality healthcare operators, which, one would hope, provides a certain level of stability. They’re currently sitting on a 71% dividend payout ratio and also boast a healthy balance sheet.
They’re also doing some rather interesting things with their portfolio. They’ve formed Janus Living, a REIT focused on senior housing, and plan to spin it off with an IPO. The idea is to unlock value and pursue new investments. They’re also selling off some outpatient medical properties to fund investments in labs. It’s a bit like rearranging the furniture to make room for a new hobby. They recently announced $925 million in transactions, which is a substantial amount of money, even for those of us accustomed to thinking in billions.
They expect to maintain their dividend rate after the Janus IPO, with dividends from the new entity helping to support the payout. And they hope that new lab investments will eventually allow them to increase the dividend further. It’s a bit of a gamble, but potentially a rewarding one.
The Bottom Line: Risk Tolerance is Key
So, which one is better? Well, it depends. Healthpeak Properties is the more adventurous option. It offers a higher current yield and potentially more upside as they unlock value in their portfolio. If you’re willing to take on a bit more risk for a potentially higher reward, Healthpeak is worth a look. However, if you’re seeking a reliable, bankable income stream that should grow steadily over time, Realty Income is the safer bet. It’s a bit like choosing between a thrilling roller coaster and a comfortable canal boat. Both will get you there, but the journey will be decidedly different. Ultimately, the choice comes down to your own personal risk tolerance and investment goals. And perhaps a healthy dose of curiosity about the fascinating world of REITs.
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2026-01-21 17:23