Passive income when you’re no longer actively working is anchored for many by their Social Security draw. But for the average retiree, that’s only $1,844.76 a month, according to November 2023 figures from the Social Security Administration.
For most folks, that means relying on other income sources, including the dividends you can generate from your stock investments. I’m an average retiree myself, and I’ve amassed a modest collection of real estate investment trusts (REITs) in my stock portfolio over the past few years just for that purpose.
Image source: Getty Images.
By tax law, REITs must pay at least 90% of their taxable income as dividends. That income comes from pools of property across about any sector you can think of, so you can diversify your selections while choosing companies with long track records of reliably growing their business and their dividends.
Three that I’d like to highlight here are American Tower(NYSE: AMT), Federal Realty Investment Trust(NYSE: FRT), and Mid-America Apartment Communities(NYSE: MAA).
The chart below shows the steady growth of their dividends and the consistency of their yields since American Tower converted into a REIT in 2012, about 15 years after its original IPO.
MAA Dividend Chart
Here’s more about each.
1. American Tower
American Tower is one of the world’s largest REITs and owners of multi-tenant communications real estate, with a portfolio of about 225,000 traditional cell towers and other antenna sites around the world and a network of data centers across the United States.
The growing global appetite for must-have space by thousands of customers, including all the major mobile carriers, has enabled Boston-based American Tower to raise its dividend every year since its REIT conversion, including by an average of 12.5% each year for the past three.
American Tower stock currently yields about 3.2% at a share price of about $214 and comfortably covers that dividend with a payout ratio of about 61% of its cash flow.
2. Federal Realty Investment Trust
Federal Realty is a Dividend King and one of the oldest REITs. It was originally founded in 1962 not long after Congress authorized REITs as a way to make real estate investing more accessible to the average American.
The Dividend King status comes from its 56 straight years of dividend increases. Its income comes from a collection of 102 open-air centers, housing 3,300 commercial tenants and 3,100 residential units.
Their location in affluent, first-ring suburban markets on the East and West Coasts should help suburban Maryland-based Federal Realty continue the resilience it’s shown through good and bad economies and everything in between.
Federal Realty stock currently trades for about $102 a share and yields about 4.3%. Its payout ratio of about 51% is based on cashflow that’s modest enough to point to the ability to grow the dividends faster than the 1.3% a year or so of the past three years, if the C-suite is so inclined.
3. Mid-America Apartment Communities
Mid-America Apartment Communities, or MAA, is a Tennessee-based developer and manager of apartment communities in the mid-Atlantic, Southeast, and Southwest.
A portfolio that as of June 30, 2023 included 101,986 units in 300 apartment complexes across 16 states and the District of Columbia makes MAA one of the U.S.’s largest owners of multifamily properties.
The growing ranks of young professionals, families, and downsizing retirees in the Sunbelt and other desirable markets where MAA is focused should keep demand for its living spaces high. Meanwhile, its stock is trading at about $132 a share and yielding about 4.3%, and MAA is riding a 14-year streak of dividend increases.
That includes an impressive annualized three-year growth of just over 23% and a payout ratio of only 55%, based on cashflow that should easily support even more boosts.
Reliable payment stream for retirees, passive or otherwise
American Tower, Federal Realty, and MAA are excellent choices for 2024 and beyond for reliable payment streams (and the possibility of capital growth) for folks seeking to bolster their income, no matter how active or passive their retirement may be.
Should you invest $1,000 in American Tower right now?
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Marc Rapport has positions in American Tower, Federal Realty Investment Trust, and Mid-America Apartment Communities. The Motley Fool has positions in and recommends American Tower and Mid-America Apartment Communities. The Motley Fool recommends the following options: long January 2026 $180 calls on American Tower and short January 2026 $185 calls on American Tower. The Motley Fool has a disclosure policy.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
