Key Points

These REITs offer high dividend yields. They also pay their dividends monthly. Three of these REITs expect to grow their payouts in the future. 10 stocks we like better than AGNC Investment Corp. ›

There are many ways to make some passive income. Investing in real estate and high-yielding dividend stocks are two tried-and-true methods. You can combine those options to collect some lucrative dividend income by investing in real estate investment trusts (REITs) with high dividend yields.

For example, investing $11,250 across the following four high-yielding REITs can generate over $1,000 of dividend income each year:

Dividend Stock Investment Current Yield Annual Dividend Income AGNC Investment(NASDAQ: AGNC) $2,812.50 15.93% $448.03 Realty Income (NYSE: O) $2,812.50 5.89% $165.66 Healthpeak Properties(NYSE: DOC) $2,812.50 7.18% $201.94 EPR Properties(NYSE: EPR) $2,812.50 6.82% $191.81 Total $11,250.00 8.96% $1,007.44

Data source: Google Finance and the author's calculations.

These REITs also pay their dividends monthly, making them ideal for those seeking to collect regular passive income to help cover their recurring expenses.

AGNC Investment

AGNC Investment is a mortgage REIT focused on investing in residential mortgage-backed securities (MBS) guaranteed against credit losses by government agencies like Fannie Mae. That makes these mortgage pools very low-risk investments. They're also relatively low-returning investments (low-to-mid single-digit yields). Image source: Getty Images.

AGNC uses leverage to earn higher returns. This investment strategy can be very lucrative. CEO Peter Federico commented on the REIT's first-quarter conference call, "A portfolio of swaps levered the way we lever them would generate a return in the low 20%." That's a high-enough return to cover the REIT's current dividend and operating expenses, which is why it remains comfortable with its high yield.

AGNC has a higher risk profile than other REITs because a sudden shift in market conditions could impact its returns and ability to maintain its dividend, which investors need to monitor.

Realty Income

Realty Income has been one of the most reliable dividend stocks over the years. It recently declared its 659th consecutive monthly dividend. The REIT has increased its payment for 110 straight quarters and all 30 years that it has been a public company, growing it at a 4.3% compound annual rate. It has also delivered positive earnings growth in 29 of those 30 years.

A big factor driving its consistency is its portfolio. Realty Income owns a diversified portfolio of net lease properties (retail, industrial, gaming, and others). Net leases provide it with very stable rental income because they require tenants to cover all property operating expenses, including routine maintenance, real estate taxes, and building insurance.

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Realty Income also has a top-tier financial profile, which enables it to steadily invest in additional income-generating properties. That steady stream of new properties empowers the REIT to routinely increase its high-yielding monthly dividend.

Healthpeak Properties

Healthpeak Properties is a healthcare REIT. It owns outpatient medical, lab, and senior housing properties. The company's diversified portfolio works together as a cohesive unit focused on healthcare discovery and delivery. Its properties will benefit from the aging of the U.S. population and the desire for better health.

Those catalysts drive stable and growing demand for space in its portfolio of high-quality healthcare properties, supporting rising rental income for the REIT. Healthpeak also has a healthy financial profile, which allows it to invest in new properties to expand its portfolio (it currently has $500 million to $1 billion of dry powder to make new investments). These drivers should enable Healthpeak to increase its high-yielding payout in the future (it recently started growing its dividend, providing investors with a 2% raise).

EPR Properties

EPR Properties specializes in investing in experiential real estate. It owns movie theaters, eat-and-play venues, fitness and wellness properties, and other attractions. The company also has a small educational property portfolio. These properties provide it with steady rental income, backed primarily by net leases.

The REIT currently has the financial capacity to invest $200 million to $300 million into new properties each year. EPR Properties has already lined up $148 million of experiential development and redevelopment projects it expects to fund over the next two years, including financing the construction of a private golf club in Georgia, its first traditional golf investment. That investment rate should drive 3% to 4% annual growth in its cash flow per share, which should support a similar dividend growth rate (it raised its payout by 3.5% earlier this year).

Big-time passive income stocks

REITs are often great investments for those seeking to generate passive income. Many have high dividend yields, which enable you to produce more income from every dollar you invest. Meanwhile, AGNC Investment, Realty Income, EPR Properties, and Healthpeak Properties all pay monthly dividends, which is ideal since they better align your income with your expenses. Most of those REITs should also steadily increase their payouts, which should enable you to collect even more passive income in the future.

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Matt DiLallo has positions in EPR Properties and Realty Income. The Motley Fool has positions in and recommends Realty Income. The Motley Fool recommends EPR Properties and Healthpeak Properties. The Motley Fool has a disclosure policy.

Want to Make $1,000 in Annual Passive Income? Invest $11,250 Into These Ultra-High-Yield Dividend Stocks. was originally published by The Motley Fool

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