Updated June 10, 2021 by Bob Ciura

Gladstone Land Corporation (LAND) is a real estate investment trust. REITs are popular investments because they tend to pay high dividend yields. Gladstone Land is one of 166 listed REITs in the Sure Dividend database. Here you can see all 166 REITs.

Gladstone Land has an attractive dividend yield of 2.1%, which isn’t the highest yield but still better than the S&P 500 Index’s average yield of ~ 1.4%. In addition, the trust pays its dividends every month rather than every quarter.

You can download our full Excel spreadsheet of all monthly dividend stocks (along with key metrics like dividend yield and payout ratio) by clicking the link below:

Gladstone Land is a one-of-a-kind REIT. Many REITs own physical buildings in various industries such as retail or healthcare. However, Gladstone Land has arable land as well as vineyards.

This article discusses the trust’s prospects and why it could be a valuable stock for diversification and high dividend income.

Business overview

Gladstone Land Corporation is a real estate investment trust, or REIT, that specializes in owning and operating real estate Farmland in the U.S. The trust owns 141 Farms, consisting of about 104th.000 Hectares of arable land. Gladstone’s business is consisting of three different options available to farmers, all of which are carried out in triplicateNet base.

The trust offers longTerm of sale-leaseback transactions traditional lease of farmland and direct purchaseHares from farm land. Gladstone‘s Portfolio has an estimate of $ 1.2billion.

Triple net leases are attractive because the trust receives steady rental income while tenants are responsible for property taxes, insurance and maintenance costs. Some of the trust’s leases also include a revenue sharing component based on the crops harvested on the farms.

The REIT benefits from strong portfolio metrics such as occupancy and rental income growth.

Source: Investor Presentation

Gladstone Land’s investment focus is primarily fresh produce, which it believes are the group with superior long-term fundamentals.

Raw materials tend to bring in less for farmers, so that landlords also tend to earn less. Focusing on the best lots used for the most profitable crops is an asset to Gladstone Land.

US farmland has proven to be a very strong investment over many years, with higher returns and lower volatility than other real estate investments and the S&P 500 Index.

Gladstone reported first quarter firsthe win on May 12ththe, 2021, with results that match both top and bottom lines. Gladstone Announces Core FundsofOperating per share of $ 0.18, up 12.5% ​​from the previous quarter.

Net likeThe set value ended the quarter at $ 12.69 per share, 3.8% more than at the end of the quarter December quarter. The growth was mainly driven by a decrease in the fair value of fixed long-fixed-term bonds that the result of higher market rates. In addition, is the question of confidenced common shares at the above estimated NAV, the generates another profit.

Growth prospects

Gladstone Land has positive long-term growth prospects as it will benefit from two major long-term trends. The first catalyst is world population growth. The world population is around 7.5 billion, and strong growth rates are expected to continue.

This is a long-term tailwind for those who own farmland as an ever-growing population requires ever greater amounts of food.

At the same time, there is only so much land for agriculture. In fact, the amount of available farmland in the US is actually declining as large amounts of farmland are converted into suburban uses every year, for homes, schools and offices, for example.

The combination of falling supply and increasing demand has caused farmland prices to rise steadily for many years. With supply and demand trends unlikely to reverse anytime soon, Gladstone Land continues to have strong growth prospects.

Source: Investor Presentation

Future growth will be achieved through growth in existing properties and through investments in new properties. For example, Gladstone Land in the first quarter of 2021 acquired three new farms consisting of 233 acres for $ 5.6 million.

There is plenty of room for future M&A activity.

The US farmland industry is highly fragmented, with significant family holdings. This means that the environment for further acquisitions remains fertile for Gladstone Land. Gladstone Land continues to make significant acquisitions as shown above and we believe this will be a steady source of growth for future confidence.

This strategy has resulted in higher stocks over time, exemplified by the significant dilution of 2019 mentioned above. But over time, acquisitions are key to the trust’s growth. Gladstone Land continues to pursue attractive acquisition opportunities and there is little reason to believe that its growth will stop.

These fundamentals have resulted in long-term growth as measured by Adjusted FFO, although growth has flattened recently. Revenue has increased 9-fold since going public – in a period of just over six years – and adjusted FFO nearly tripled in that time.

We expect adjusted FFO / equity growth of 5% per annum over the next five years.

Dividend analysis

Unsurprisingly, Gladstone Land’s dividends will be a significant part of future total returns. This is of course typical for a REIT. REITs are required by law to distribute at least 90% of their earnings to shareholders in the form of dividends, which is why so many trusts offer very high dividends.

Gladstone Land currently pays a monthly dividend of $ 0.045 per share. The annualized payout of $ 0.54 per share equates to a current dividend yield of 2.1%.

Gladstone Land has a good dividend record. The company has paid 100 consecutive monthly dividends since it went public in January 2013 and has increased its dividend 22 times over the past 25 quarters.

Based on an expected adjusted FFO per share of $ 0.65, Gladstone Land has a projected dividend payout ratio of 83%. This is an important signal that the distribution is covered by the underlying adjusted FFO.

Final thoughts

The increasing world population and the decreasing supply of available farmland in the US represent a very bright future for Gladstone Land. Supply and demand factors support continued investments in farmland. This means that Gladstone Land should be able to keep growing its FFO and dividend over the long term.

The trust pays an attractive dividend yield of over 2% with the potential for dividend increases at an above inflation rate over time. Overall, Gladstone Land is an attractive monthly dividend stock.

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