I love the idea of owning farmland. You can earn solid income… Plus, that income can keep up with inflation.
The thing is, I don’t know how to buy it correctly. Gladstone Land (LAND) does.
Gladstone Land owns more than 67,000 acres of U.S. farmland worth $558 million… As of its latest financial report, its land value is $13.57 per share (in net asset value).
The company owns 79 farms in nine states… So it offers you a diversified portfolio of farmland, both geographically and across a variety of crops.
That all sounds good so far.
And it gets better…
Over the last month, shares of Gladstone Land have fallen. It’s trading at roughly $11.80 per share as of Friday’s close – or a 13% discount to net asset value. So you can own its diversified farmland portfolio at a solid discount today.
Historically, farmland has been a good hedge against inflation. But one of the best reasons to invest is Gladstone’s dividend…
Gladstone is structured as a real estate investment trust (“REIT”). REITs are legally required to pay out at least 90% of their net earnings in the form of dividends.
Gladstone pays a stable (but growing) monthly dividend – which it takes out of rental income from leasing land to farmers. With the share price so low today, the monthly dividend payment works out to a 4.5% yield.
David Gladstone, the company’s founder, explained what kind of business he’s running during his latest conference call with investors. He said:
We recently raised the dividend again… Over the past 40 months, we raised the dividend 10 times…
Our goal is to continue to increase the dividend at a rate that outpaces inflation. As you know, I’m a large shareholder and I’m definitely liking dividend increases, and even if it’s only a small amount or a quarterly change.
Since 2013, we’ve made 63 consecutive monthly distributions to stockholders. It’s [about $3.51 per share] total distributions.
Paying distributions to shareholders is our paramount business. We are in essence a dividend-paying company and want to remain so.
It’s good to hear that he understands he is in the business to serve you – the shareholder – with dividends.
With a stock market value of about $180 million, Gladstone Land is too small for me to write up as a recommendation to my subscribers. I can’t research it for my main newsletters. Still, I wanted to pass this idea along to you.
You are welcome to dig in a bit more and see if it’s right for you.
David actually sat down with my good friend Meb Faber for an interview a couple weeks ago. It’s a great starting point for you to learn more, and it’s easy to follow. The transcript is available on Meb’s website right here.
For now, you should know that Gladstone is committed to rewarding shareholders through dividend payments… And it’s trading at a healthy discount today.
Check it out!
Good investing,
Steve
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Source: Daily Wealth