If You Invested $10,000 In Agree Realty Corp. 5 Years Ago, Here's How Much You Would Be Making In Dividends Today

Investing in dividend stocks is a wonderful way for those nearing or in retirement to have a consistent and steady income for paying bills, traveling, assisting with grandchildren’s education or just having fun. But buying solid dividend companies is not always easy.

One way to measure the performance of a company is to look at its five-year dividend history. Five years of substantial dividend growth indicates a company has performed well through good and bad economic cycles and speaks well to its present earnings and future potential.

Take a look at one real estate investment trust (REIT) with an impressive five-year dividend growth performance and see how much a $10,000 investment in April 2018 would be generating in dividends today.

Agree Realty Corp. ADC is a net-lease REIT with 38 million square feet of leasable space in 1,839 properties nationwide. Its diversified investment-grade retail tenant portfolio includes Sherwin-Williams Co., Walmart Inc., The Home Depot Inc., TJX Cos. Inc., AT&T Inc., CVS Pharmacy Inc., Aldi, Wawa Inc. and many other well-established companies not likely to miss rent payments regardless of economic conditions.

Agree Realty was founded in 1971 as Agree Development Co. and launched its initial public offering (IPO) as Agree Realty Corp. in 1994.

In April 2018, if you invested $10,000 in Agree Realty, you would have purchased 203.33 shares at $49.18 per share. Its most recent closing price was $67.66.

The quarterly dividend at that time was $0.54 per share, and it was increased five times through December 2020 to $0.62 per share. Beginning in January 2021, Agree Realty decided to pay its dividend monthly rather than quarterly. The first monthly dividend payment was $0.207. Since that time, the dividend has been increased four times and now pays $0.24.

The annual dividend in April 2018 was $2.16. The annual dividend is now $2.88, so the annual dividend has increased by 33.3% over the five-year period.

Over the course of the five years, your original $10,000 investment would have brought you a total return of 62.89%, with $18.48 in appreciation and $12.45 in dividends paid. Your $10,000 investment would now be worth $16,288.95.

If, like many investors, you chose to reinvest your dividends, the original 203.33 shares would have grown to 245.47 shares and your investment would now be worth $16,609.09.

The dividend growth coincides with the growth of earnings and revenue over the past five years. Funds from operation (FFO) of $0.71 in the first quarter of 2018 have now grown to $0.95, and revenue of $34.57 million has more than tripled to $116.53 million in the fourth quarter of 2022. The FFO and revenue numbers in the fourth quarter were better than analysts’ estimates.

The payout ratio of $2.88 to forward FFO of $3.95 is 72.9%, which is above the safe range, yet the dividend is still easily covered by the FFO.

Agree Realty’s 52-week range is $63.34 to $80.44, and its recent closing price was $71.68. The ex-dividend date is usually on the last day or two of each month. Year to date, Agree Realty has a negative total return of 3.12% but has been faring better recently. Since March 23, it has had a total return of 4.56%.

If you’re an income investor, and you’re looking for a relatively safe REIT that has a 4.2% yield and pays monthly income, Agree Realty could be one to investigate.

Over the past five years, private market real estate investments have outperformed the publicly traded REIT market by about 50%. Check out Benzinga’s Real Estate Offering Screener to discover the latest passive real estate investments.

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