Earning $100 a Month from Getty Realty Stock: A Comprehensive Guide

Investing in dividend stocks can be a reliable way to generate passive income, especially in volatile markets. Getty Realty Corp. (GTY) is one such stock that has caught the attention of income-seeking investors due to its attractive dividend yield. In this article, we will explore how much it would take to earn $100 a month from Getty Realty stock, considering the current dividend amount per share and other relevant factors.

Understanding Getty Realty Corp.'s Dividend

Getty Realty Corp. is a real estate investment trust (REIT) that focuses on owning and leasing gas station and convenience store properties. The company has a strong track record of paying dividends, with a current dividend yield of 6.18%, which is significantly higher than the sector average of 3.578%. This high yield makes it an attractive option for investors looking to generate passive income.

Calculating the Number of Shares Needed

To determine how many shares of Getty Realty Corp. an investor needs to purchase to earn $100 per month in dividends, we need to consider the current dividend amount per share and the payout frequency.

# Step 1: Identify the Quarterly Dividend Per Share

The next dividend payment for Getty Realty Corp. is $0.47 per share, paid quarterly. This means the annual dividend per share is:

\[
4 \times \$0.47 = \$1.88 \text{ per year}.
\]

# Step 2: Calculate Required Quarterly Dividend Income

To earn $100 per month, the investor needs:

\[
\$100 \times 3 \text{ months} = \$300 \text{ per quarter}.
\]

# Step 3: Compute the Number of Shares Needed

Using the quarterly dividend per share ($0.47):

\[
\text{Number of shares} = \frac{\$300}{\$0.47/\text{share}} \approx 638.3 \text{ shares}.
\]

Since fractional shares are typically not available, the investor must round up to 639 shares to ensure at least $300 per quarter.

Validating the Calculation

To ensure the accuracy of our calculation, let's validate it with the stock price and dividend yield data.

The stock price as of the data is $30.36. The dividend yield is 6.12%, which aligns with the calculation:

\[
\frac{\$1.88 \text{ annual dividend}}{\$30.36 \text{ stock price}} \times 100 \approx 6.2\%.
\]

This confirms that the dividend amount and yield are consistent with the current market conditions.



Risk Factors to Consider

While Getty Realty Corp. offers an attractive dividend yield, it is essential to consider the risk factors associated with investing in this stock. One of the primary concerns is the high payout ratio, which is currently at 85.59%. This means that a significant portion of the company's earnings is being used to pay dividends, leaving less room for reinvestment in growth opportunities.

Additionally, the dividend cash payout ratio is 100%, which indicates that the company is using all of its free cash flow to pay dividends. This could be a red flag for investors, as it suggests that the company may struggle to maintain its dividend payments during economic downturns or periods of financial stress.

Alternatives and Diversification

Given the risks associated with Getty Realty Corp., it may be prudent for investors to consider diversifying their portfolio with other high-yield dividend stocks. Some alternatives in the real estate sector include Realty Income (O) and AGNC Investment (AGNC), both of which offer attractive dividend yields and have a history of consistent dividend payments.

Conclusion

In conclusion, an investor would need to purchase 639 shares of Getty Realty Corp. to earn $100 per month in dividends, assuming the dividend remains at $0.47 per share quarterly. However, it is crucial to consider the risks associated with this investment, such as the high payout ratio and the potential for dividend cuts during economic downturns. Diversifying the portfolio with other high-yield dividend stocks can help mitigate these risks and provide a more stable income stream.



By carefully considering these factors and diversifying their portfolio, investors can maximize their passive income while minimizing the risks associated with high-yield dividend stocks.