My Top Dividend Stock to Buy in August (and It's Not Even Close)

The calendar turning to August means galore things for people. As the blistery and humid upwind rolls in, radical often usage this clip for relaxation and vacations.

Between leisure activities, it's besides a bully clip to reappraisal your investments, since galore companies person precocious reported quarterly results. For those funny chiefly successful dividends, there's 1 banal that stands caput and shoulders supra the others.

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Here's wherefore Realty Income (NYSE: O) has earned its spot arsenic my apical dividend banal to purchase.

Structure favors dividends

Realty Income is structured arsenic a existent property concern spot (REIT). REITs own, operate, oregon concern existent estate.

It's an perfect concern for dividend-seeking investors. That's due to the fact that REITs indispensable wage retired astatine slightest 90% of their pretax income arsenic dividends.

But Realty Income stands retired among REITs. It chiefly owns retail properties, receiving implicit 78% of its rent from the sector. While galore investors feared that online buying would destruct the request for carnal stores, those fears person been overblown. Besides, absorption focuses connected tenants with beardown omnichannel presences and those whose shoppers similar the in-person experience.

These see market and convenience stores, home-improvement stores, dollar stores, automotive work stores, cause stores, restaurants, and wholesale clubs.

Prioritizing dividend maturation

Realty Income has agelong been successful, having existed since 1969. And it has a agelong past of raising dividends.

The REIT, which pays dividends monthly, typically raises the payout quarterly. Most recently, successful June, the committee of directors nudged the monthly complaint up from $0.2705 to $0.271. Realty Income has instituted 115 consecutive quarters of dividend increases.

The institution tin spend the payouts, too. Its second-quarter adjusted funds from operations (AFFO) grew 2% twelvemonth implicit twelvemonth to $1.09 a share. Management besides upped this year's AFFO per stock anticipation to $4.44-$4.45.

That's an important measurement for REITs since it's currency disposable for distribution. On this basis, Realty Income volition easy screen the caller annualized dividend of $3.25.

Above-average dividend output

Based connected the caller rate, Realty Income's banal has a 5.1% dividend yield. That's 5 times the S&P 500 index's 1% yield.