5.5% Yielding Dividend Stock Offers Significant Passive Income

September 17, 2024 05:11 AM PDT | By Team Kalkine Media

5.5% Yielding Dividend Stock Offers Significant Passive Income — Image source: Shutterstock

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One notable option for those seeking income is W.P. Carey (NYSE:WPC), a real estate investment trust (REIT) that offers a dividend yield significantly above the S&P 500 averageThis REIT specializes in net lease properties, where tenants are responsible for all operating expenses, including maintenance and taxesW.PCarey’s portfolio includes approximately 1,300 warehouse, industrial, and retail properties, along with 89 self-storage facilities, spread across North America and EuropeThis diversification and high-quality portfolio contribute to stable rental income with modest annual growth.

W.PCarey's structure involves long-term net leases with built-in rent escalations, either fixed or inflation-linkedThis setup provides stability and predictability in revenueThe REIT projects an adjusted funds from operations (FFO) per share between specific ranges for the year, which comfortably covers its quarterly dividend paymentsThe dividend payout ratio is less than 75% of the adjusted FFO, allowing the company to retain a substantial portion of cash flow for future endeavors.

The REIT maintains a robust balance sheet with an investment-grade rating and a manageable leverage ratioThese financial characteristics offer the flexibility needed for growth and expansionW.PCarey plans to allocate significant resources to acquiring new properties, funding redevelopment projects, and expanding its portfolio.

Recent activities include completing a major industrial property transaction in Europe and acquiring additional industrial properties in North AmericaThese developments are expected to contribute to ongoing growth in rental income and support further dividend increases.

W.PCarey's consistent performance and strategic growth initiatives make it a compelling option for those aiming to generate reliable income through dividendsIts well-established portfolio and effective lease structures underpin its capacity to offer a steady and increasing dividend yield.

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