Warren Buffett owns many stocks, many of which pay dividends. But his company Berkshire Hathaway (BRK.A -1.50%) (BRK. B -1.69%)owns only one Real Estate Investment Trust (REIT): SAVE capital (STURGEON -0.52%). It pays a whopping dividend that currently yields 5.8%.
If you’re a Warren Buffett believer and like STORE Capital’s real estate-backed dividend, you’ll likely love Fellow’s payouts, too REITs Agree real estate (ADC -1.44%) and WP Carey (WPC -0.85%). Here’s a closer look at these dividend stocks, which have some even more appealing characteristics than STORE Capital.
Same characteristics with a more frequent dividend
STORE Capital focuses on ownership sSingles-tenant Oconstantly rightreal eState development companies in manufacturing, service-oriented trade and the service sector. The REIT leases these buildings on long-term triple-net leases, with the tenant responsible for building insurance, property taxes and maintenance. This provides STORE Capital with very stable rental income to support its dividend.
Agree Realty has a similar focus. It owns detached properties that are leased to key retailers such as grocery stores, hardware stores, auto repair shops and pharmacies. It uses net rents in owning the buildings and land leases if it only owns the underlying property. Both lease structures give him constantly increasing rental income.
Agree Realty uses those earnings to pay an attractive dividend of 3.7%. While that’s not as high as STORE’s dividend yield, what sets Agree Realty apart is its performance monthly dividend payments. That makes it an even more attractive option for investors looking for passive income.
Another unique feature of Agree Realty is its ability to grow its dividend. The REIT has increased its payout by 6.1% per year since 2015, beating STORE Capital’s 5.9% growth rate.
An even more diversified portfolio
WP Carey is also focused on owning mission-critical properties that are leased to quality tenants. However, it has a much more diversified real estate portfolio than STORE Capital. His portfolio currently consists of real estate in the areas of industry (26% of annual rent), warehouse (24%), office (20%), retail (16%), self-storage (5%) and other (9%). ) sectors. That’s a much broader industry diversification than STORE Capital, which derives its rental income from tenants in manufacturing (21%), service-oriented retail (15%) and service sectors (64%).
WP Carey is also much more diversified geographically. STORE Capital is currently focused on owning real estate in the US, while WP Carey derives 64% of its rental income from the US, 33% from Europe and 3% from other territories.
This greater portfolio diversification helps reduce WP Carey’s risk profile and improve the stability of its 5.1% dividend. It also gives the company more flexibility to continue growing. For example, the company made a record $1.73 billion investment last year, driven by opportunities to acquire real estate in the warehouse and industrial sectors. These two property classes accounted for more than 70% of the acquisition volume. It also saw many deals in Europe, accounting for 40% of its 2021 volume.
WP Carey’s ability to continue to expand has allowed the company to steadily increase its dividend. The diversified REIT has given investors a raise every year since it went public in 1998. With a wide range of options and a solid financial profile, the REIT should have no problem continuing to grow its portfolio and dividend in the future.
High quality dividend stocks
STORE Capital pays a profitable dividend, making it an enticing option for dividend investors. While it’s the only REIT owned by Berkshire Hathaway, it’s not the only big one out there. Investors who like this Buffett-owned REIT will likely love Agree Realty and WP Carey, given the former’s monthly payments and the latter’s more diverse portfolio.
Matthew DiLallo has positions in Berkshire Hathaway (B shares) and WP Carey. The Motley Fool has positions in and recommends Berkshire Hathaway (B shares) and STORE Capital. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.