Gladstone Land – Ticker LAND
As I was reviewing potential investments yesterday, I looked at an investment I have owned in the distant past. The investment is LAND. After evaluating my criteria for this type of REIT, including a look at the REITRATING (currently 7.6) I bought 200 shares of LAND for my Roth IRA. One thing that probably has ongoing value even during a coronavirus pandemic shutdown is farming acreage.
Beware of Incorrect REIT Payout Ratios
When evaluating a REIT, you would do well to completely ignore the dividend payout ratio presented by Fidelity Investments. Fidelity currently has LAND at -412.62%. Use a website like REITNOTES to see the FFO, AFFO and payout ratio based on FFO/AFFO.
Investopedia definition for: FFO
This is a more risk-on investment because LAND is a micro-cap stock. LAND’s dividend is paid monthly, rather than quarterly, so the next three dividends have already been declared.
Founded in 1997, Gladstone Land is a publicly traded real estate investment trust that acquires and owns farmland and farm-related properties located in major agricultural markets in the U.S. and leases its properties to unrelated third-party farmers. The Company, which reports the aggregate fair value of its farmland holdings on a quarterly basis, currently owns 113 farms, comprised of approximately 88,000 acres in 10 different states, valued at approximately $885 million. Gladstone Land’s farms are predominantly located in regions where its tenants grow fresh produce annual row crops, such as berries and vegetables, which are generally planted and harvested annually.
The Company also owns farms growing permanent crops, such as almonds, apples, figs, olives, pistachios, and other orchards, as well as blueberry groves and vineyards, which are generally planted every 10 to 20-plus years and harvested annually. The Company may also acquire property related to farming, such as cooling facilities, processing buildings, packaging facilities, and distribution centers.
The Company pays monthly distributions to its stockholders and has paid 84 consecutive monthly cash distributions on its common stock since its initial public offering in January 2013. The Company has increased its common distributions 17 times over the prior 20 quarters, and the current per-share distribution on its common stock is 0.04465 per month, or 0.53580 per year.