ADC - 1 Magnificent Dividend Stock Down 25% to Buy and Hold Forever
2024-05-09 06:32:00 ET
Agree Realty (NYSE: ADC) has become a magnificent dividend stock over the past decade. The real estate investment trust (REIT) has grown its dividend at a 5.6% compound annual rate during that period. It also switched from making quarterly dividend payments to a monthly schedule, increasing its attractiveness to those seeking a recurring income stream.
Despite Agree Realty's success, shares of the REIT have slumped about 25% from their peak level in 2022. That sell-off and a steadily rising payout have pushed its dividend yield up to 5.1%, which is significantly higher than the S&P 500 (1.4% dividend yield). With more growth ahead, it's a great dividend stock to buy and hold for a potential lifetime of recurring passive income.
Higher interest rates have been the main factor weighing on Agree Realty's stock over the past couple of years. Higher rates affect the value of real estate, driving it down to boost income yields above lower-risk alternatives like bonds. They also make it more expensive for REITs like Agree Realty to borrow money to fund new acquisitions.
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1 Magnificent Dividend Stock Down 25% to Buy and Hold Forever