Again, this is a REIT, and the PE ratio and PEG ratio for this industry tend to be much higher than for the S&P 500.
The third company on the list is the only non-REIT, Shaw Communications Inc (USA) (NYSE:SJR) . Shaw Communications Inc (USA) (NYSE:SJR) is currently trading at approximately $24 and yields 4.40%. The five-year DGR is 6.4% and the total twelve-month return is 26.9%. The company has been raising dividends for 10 years.
Other metrics include analysts’ five-year annual growth estimate (10.1%) and the company’s PE (14.2), and the payout ratio is 62%.
Shaw Communications Inc (USA) (NYSE:SJR) scores a 16 on my system, which keeps it within my radar for potential inclusion at some point in the future.
Number four on the list is Inland Real Estate Corporation (NYSE:IRC) , a retail REIT centered in Chicago.
Inland Real Estate Corporation (NYSE:IRC) is currently trading at approximately $12 per share and yields 4.70%. The trust’s distribution has been frozen at $0.57 per year since 2010, when it cut the distribution by 23% from its 2009 level. The trust has returned 50% over the past twelve months.
Other metrics include analysts’ five-year annual growth estimate (-24%) and the company’s PE (93.2); the payout ratio is 63% of the FFO.
Inland Real Estate Corporation (NYSE:IRC) scores a 10.
The last company in the list of monthly high-yielders is American Realty Capital Properties Inc (NASDAQ:ARCP), a commercial REIT. It is currently trading at approximately $18 and yields 5.10%. Its distributions only began in 2011, and have been raised several times, so that the current distribution is 4% higher than the initial distribution in September 2011. The trust has returned 71% over the past twelve months.
Full-year 2013 EPS is a reduction of 14% versus 2012, and the estimate for 2014 is a 21% increase over 2013;
Other metrics include analysts’ five-year annual growth estimate (NA), the company’s PE (18.7) and its payout ratio is 92% of FFO.
Again, I really don’t see what there is to like in this REIT when compared to other well-established dividend-payers.
I’ve prepared a chart which shows how each company scores on my rating system.
| Years | Yield | DGR | EGR | Payout | Total Return | PE | TOTAL | |
|---|---|---|---|---|---|---|---|---|
| LTC | 0 | 4 | 0 | 1 | 2 | 4 | 0 | 10 |
| O | 2 | 3 | 0 | 0 | 1 | 4 | 0 | 10 |
| SJR | 1 | 4 | 1 | 3 | 1 | 4 | 2 | 16 |
| IRC | 0 | 4 | NA | NA | 2 | 4 | 0 | 13 |
| ARCP | 0 | 4 | NA | NA | 0 | 0 | 2 | 10 |
High yields and monthly distributions would be fantastic for an income portfolio, but those factors alone are not worth sacrificing the stability and reliability of regular quarterly-paying dividend companies.
There’s a reason why there are no REITs in my Perfect Dividend Portfolio. Even Realty Income Corp (NYSE:O), the oldest and most popular, does not come anywhere close to qualifying under my criteria. These companies have impressive share price increases over the past year or so, but I really don’t understand the attraction.
If you want companies with great dividend-paying histories, with excellent yields, with strong prospects for future and good current valuations, I encourage you to check out my Perfect Dividend Portfolio. It holds what I believe are the ten best.
The article 5 High-Yield Dividend Companies That Pay Monthly originally appeared on Fool.com is written by Karin Hernandez.
Karin Hernandez has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Karin is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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