Why STAG Industrial, Inc. (STAG) Is Among the Best Stocks That Pay Monthly Dividends in 2024

STAG Industrial, Inc. (NYSE: STAG) has been a standout performer in the real estate investment trust (REIT) sector, particularly for investors seeking monthly dividend stocks. With a strong focus on industrial real estate and a robust financial profile, STAG has consistently delivered attractive returns and dividend growth. In this article, we'll explore why STAG is among the best stocks that pay monthly dividends in 2024.

A Robust Portfolio of Industrial Real Estate

STAG Industrial specializes in the acquisition, ownership, and operation of industrial properties throughout the United States. As of December 31, 2023, the company owned 569 buildings in 41 states with approximately 112.3 million rentable square feet. This diversified portfolio consists of 493 warehouse/distribution buildings, 70 light manufacturing buildings, one flex/office building, and five Value Add Portfolio buildings. Additionally, STAG had six development projects underway.

The company's focus on industrial real estate has proven to be a resilient and lucrative strategy. The growing adoption of e-commerce and onshoring of manufacturing have driven demand for industrial properties, leading to higher rental rates and occupancy levels. STAG's portfolio is approximately 98.2% leased, with no single tenant accounting for more than approximately 2.9% of its total annualized base rental revenue and no single industry accounting for more than approximately 11.0%. This diversification helps mitigate risk and ensures a consistent income stream.

Consistent Dividend Growth and Yield

STAG Industrial has a strong track record of dividend growth, having increased its dividend every year since it went public in 2011. The company's current dividend yield is over 4%, which is significantly higher than the S&P 500's yield of around 1.2%. This high yield, combined with consistent dividend growth, makes STAG an attractive option for income-focused investors.

STAG's dividend payout ratio is approximately 73% of its adjusted funds from operations (FFO), indicating a conservative and sustainable dividend policy. The company's fully integrated acquisition, leasing, and operations platforms, led by a senior management team with decades of industrial real estate experience, contribute to its ability to deliver attractive long-term stockholder returns in all market environments.

Strong Financial Profile and Balance Sheet

STAG Industrial has a strong investment-grade credit rating, which is backed by a low leverage ratio. This gives the company the financial flexibility to continue acquiring income-generating industrial properties and maintain its conservative dividend payout ratio. As of December 31, 2023, STAG's Operating Portfolio was approximately 98.4% leased, further enhancing its balance sheet strength and ability to maintain steady dividend payouts.

Analyst Recommendations and Opinions

As of December 29, 2024, STAG Industrial has received 12 analyst opinions, with 2 rating the stock as a "strong buy," 3 as a "buy," 7 as a "hold," 0 as a "sell," and 0 as a "strong sell." The average price target for STAG is $36.00, indicating significant upside potential from its current price of $33.86.

The Opportunity Today

STAG Industrial's focus on industrial real estate, strong dividend growth, and robust financial profile make it an attractive option for investors seeking monthly dividend stocks in 2024. The company's diversified portfolio, conservative dividend payout ratio, and low leverage ratio contribute to its ability to maintain and grow its dividend payments, even in challenging market conditions.

While STAG's stock price may experience volatility in the short term, its long-term prospects remain strong. The growing demand for industrial real estate, combined with the company's disciplined investment strategy and experienced management team, positions STAG well to continue delivering attractive returns and dividend growth for its shareholders.

In conclusion, STAG Industrial, Inc. (STAG) is among the best stocks that pay monthly dividends in 2024. Its robust portfolio of industrial real estate, consistent dividend growth, strong financial profile, and analyst recommendations make it an attractive option for income-focused investors seeking durable passive income. As the company continues to execute its disciplined investment strategy, STAG is well-positioned to deliver attractive long-term returns for its shareholders.