Want $1,000 in Dividend Income? Here’s How Much You Have to Invest in W. P. Carey Stock.

W. P. Carey (WPC -1.14%) has a long history of paying dividends. While the diversified real estate investment trust (REIT) reset its payment level last year after making the strategic decision to exit the troubled office sector, it still offers a high yield. At more than 5.5%, it’s significantly above the S&P 500‘s dividend yield (less than 1.5%).

That high dividend yield enables investors to generate more income for every dollar they invest in the REIT’s stock.

W. P. Carey has been rebuilding its dividend following last year’s strategic reset. Its current payment level is up to $0.875 per share each quarter ($3.50 annually). At that dividend payment rate, you’d need to own more than 285 shares to produce $1,000 of dividend income each year. With the stock price recently around $63, you’d have to invest nearly $18,000 in its stock to collect $1,000 of dividend income annually. 

That’s a much lower investment rate, compared to other options. For example, given the S&P 500’s much lower dividend yield, you’d need to invest over $79,000 in an S&P 500 index fund to reach $1,000 of annual dividend income.

W. P. Carey’s dividend should rise in the future. It exited the office sector due to the headwinds facing those properties. Those sales brought in cash to reinvest in properties with better long-term growth potential, like industrial real estate.

It has already started rebuilding its portfolio, buying $641 million of properties in the first half of the year, including a 19-property industrial real estate portfolio it bought in a two-phased deal for $190 million. Those and future acquisitions should grow the REIT’s rental income, which will enable it to increase its dividend.

With a high-yielding payout that should steadily rise in the future, W. P. Carey is an excellent option for those seeking to collect passive dividend income.