This 10% Dividend Stock Pays Cash Every Month!

If you’re looking for high monthly passive income, this dividend stock has it in spades! And returns should come right along with it.

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There are quite a few dividend stocks out there these days that have seen their yields surge. This is what happens, however, as share prices drop. That’s why it’s always a good idea to be careful before diving into just any high-yielding dividend stock.

Which is why today we’re going to look at Slate Grocery REIT (TSX:SGR.UN), and why it might be a good option for your portfolio today.

First, earnings

If you want to see how a company is fairing through this downturn, look at earnings. And in the case of Slate stock, this is where the value lies. The company, of course, went through some difficulties after pandemic restrictions lifted and costs continued to rise. But now, it seems as though the worst is over.

Slate REIT saw new deals come in during the last quarter, bringing occupancy up to 94.1%. Net operating income also rose by 2%, providing even more reason to consider the stock. Yet the company’s units are continuing to trade at a discount compared to net asset value (NAV). Therefore, it’s a great time to consider the stock, in management’s opinion.

So much so that the company has continued to buy back shares at these lower prices. As of the last quarter, the company had purchased 1.2 million shares at an average price of $9.61. Given shares traded at $11.50 when writing, clearly they got a deal.

Analysts think so, too

Overall, analysts believe that the company will continue to perform well, along with the rest of the grocery sector. The company remains in tact, and the defensiveness of the grocery sector is certainly strong. Furthermore, it continues to operate with grocery-anchored properties across the United States – a place where there is more room for competition.

Therefore, Slate stock should continue to show resilience even in these trying times. Yet as the market improves, investors will likely see the company’s share price improve right along with it. Which is why now is an excellent time to buy if you’re looking for both returns and a higher dividend yield.

In fact, the consensus price target right now remains at $13.45 for Slate stock. That would provide a potential upside of 17% as of writing! So let’s move to what you could get.

Bringing in passive income

This high-yield stock is a steal these days, one that could bring in superb passive income in the next year. Right now, it trades at 20.6 times earnings, so it’s fairly valued in terms of shares versus earnings. Yet it seems far more valuable trading at 0.7 times book value and 2.6 times sales.

Furthermore, shares remain down a whopping 26% in the last year alone. While the payout ratio is high, hopefully as share prices improve this will put it back into a normal range. For now, however, the company remains in a solid position for those wanting passive income in 2024. So here is how much you could achieve should shares reach 52-week highs from a $5,000 investment.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYPORTFOLIO TOTAL
SGR.UN – now$11.50435$1.16$504.60monthly$5,000
SGR.UN – highs$16.38435$1.16$504.60monthly$7,125.30

In 2024, investors could achieve $2,125.30 in returns and $504.60 in dividends. That’s total passive income of $2,629.90! Dished out monthly, that comes to a total of $219.16 each and every month.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Slate Grocery REIT. The Motley Fool has a disclosure policy.

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