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Passive Income Gold Mine: Own This Many Getty Realty Shares for $20,000 Yearly
Key Points
Getty Realty specializes in owning and leasing gas stations, convenience stores, and other automotive-related real estate.
The REIT has a forward dividend yield of 6.92%.
Getty Realty executed 12 consecutive annual dividend increases and has an average annual dividend growth rate of approximately 4% over the past five years.
For investors seeking steady income from their portfolios, high-quality, high-yield dividend stocks can be just the ticket. "High quality" is an important part of that description, as many high-yielders can turn into yield traps. It's not necessarily best to buy the highest-yielding stocks out there, but rather the ones with the most sustainable payouts and the strongest track records in areas like dividend growth.
Among several names meeting these criteria, Getty Realty (NYSE: GTY) stands out as a great choice at today's prices. Let's dive in and find out more about this unique real estate investment trust (REIT).
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Getty Realty at a glance
As the company itself puts it, Getty Realty "is the leading publicly traded, net lease REIT specializing in acquisition, financing and development of convenience, automotive and other single tenant retail real estate."
With a portfolio totaling 1,160 properties across the U.S., Getty is a major landlord for gas station and convenience store operators, as well as businesses such as car washes and auto service stores. More recently, Getty has expanded into owning triple-net-lease fast food restaurant buildings as well.
While not a glamorous business, it certainly generates considerable cash flow for investors. At least, based on the stock's high forward dividend yield of 6.92%.
What makes this REIT a strong buy for income investors
Based on the current dividend yield, ownership of 10,554 shares, worth approximately $288,865, would be required to produce $20,000 in annual income. Not too shabby compared to the required investment for generating this same figure from other high-yield dividend stocks.
While there are stocks with similar or even higher forward yields, Getty Realty has established a strong dividend-growth track record. The REIT has increased its dividend for 12 years consecutively. Over the past five years, dividends have increased by an average of 4% annually.
Getty stock has traded sideways in recent years, but over a long time frame, it has delivered solid returns, gaining 6,482% since its 2005 initial public offering (IPO). Given its numerous qualities and track record, now may be a great time to buy.
Thomas Niel has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.