Headquartered in McLean, Virginia, and founded in 2001, the Gladstone Companies have managed to deliver high total returns to the shareholders of their four publicly traded investment funds.
The Gladstone Companies are a family of four public investment funds that have managed to maintain a steady asset appreciation, dividend income payouts and deliver high total returns by financing, acquiring and investing in both assets and middle-market companies.
Currently, the Gladstone Companies’ family of four investment trusts includes the Gladstone Capital Corporation (NASDAQ: GLAD), the Gladstone Commercial Corporation (NASDAQ: GOOD), the Gladstone Investment Corporation (NASDAQ: GAIN) and the Gladstone Land Corporation (NASDAQ: LAND).
With similar asset appreciation patterns, all four of the Gladstone Companies investment trusts have delivered positive capital gains over the trailing 12 months and have provided at least five years of dividend distributions.
Additionally, all four investment trusts distribute their income distributions monthly and have identical ex-dividend and pay dates. All four companies will distribute the next round of dividend distributions on the October 31, 2019, pay date. On that date, the companies will distribute dividend income payouts to all eligible shareholders of record. Ownership of company shares at least one day before the October 21, 2019, ex-dividend date will provide an investor with shareholder of record status and the eligibility to receive the dividend payouts.
If the dividend distributions were either paid quarterly or at an even lower frequency, interested investors would have to rush to do their analysis and due diligence in order to determine the worth of these stocks before the ex-dividend date. However, since all four of these companies pay a monthly dividend, missing the ex-dividend date this month will delay eligibility to receive dividend distributions by only another month.
Furthermore, in line with the belief that total return must exceed the dividend yield, all three equities listed below have rewarded shareholders with a total return of at least 12% during the trailing 12-month period. Here are the four public investment funds and they are listed in ascending order by their one-year total return.
4 High Total Returns Gladstone Companies: #4
Gladstone Land Corporation (NASDAQ:LAND)
Dividend Yield: 4.48%
The Gladstone Land Corporation is a publicly traded real estate investment trust (REIT) that invests in farmland and farm-related properties that are located in major agricultural markets in the United States. It then leases this land to unrelated third-party farmer-tenants.
This REIT has enhanced its annual dividend payout for the past five consecutive years. Over those five years, the annual dividend amount rose nearly 50%, which corresponds to an average growth rate of 8.1% per year.
LAND’s share price declined during the three years that followed its establishment in 2013. However, the share price has since reversed its trend and has advanced more than 70% since the beginning of 2016. Over the past twelve months, the share price has traded sideways and has delivered a minimal gain of only 0.4%.
Therefore, marginal capital gains did not contribute a noticeable share to the total return of nearly 5% over the last year. The total gains over the past five years have been 22% and a significant share price decline in late 2015 has pushed the three-year total return to more than 35%.
4 High Total Returns Gladstone Companies: #3
Gladstone Capital Corporation (NASDAQ:GLAD)
Dividend Yield: 8.72%
The Gladstone Capital Corporation is a business development company (BDC) that pays monthly cash distributions to its stockholders and invests in lower middle market businesses in the United States.
The company has paid a steady annual dividend of $0.84 per share over the past decade. At the current share price level, that annualized dividend payout amount corresponds to an 8.72% forward dividend yield, which the highest yield in this group. In addition to outperforming the current yields of its corporate peers, GLAD’s current yield also outperformed the 3.04% yield average of the entire Financial sector by nearly 120%.
Additionally, the company’s current yield also is more than twice the 3.27% average yield of the companies in the Property Management industry segment. Moreover, the company’s current yield also outperformed the 6.31% simple average yield of the Property Management segment’s only dividend-paying companies.
While sporting the highest dividend yield in this group, GLAD’s asset appreciation falls just short of 3% over the trailing one-year period. Therefore, the one-year combined total return of just under 12% managed to outperform only one other Gladstone company — the Gladstone Land Corporation, which has a total return over the past year of less than 5%. Stronger asset appreciation over the extended term has pushed GLAD’s total returns over the last three and five years to more competitive levels of 50% and 63%, respectively.
4 High Total Returns Gladstone Companies: #2
Gladstone Investment Corporation (NASDAQ:GAIN)
Dividend Yield: 6.66%
The Gladstone Investment Corporation specializes in lower middle market, acquisitions, buyouts, recapitalizations and debt refinancing. After losing nearly 85% of its value during the 2008 financial crisis, the company’s share price has advanced more than five-fold to regain more than 70% of its losses since the stock’s all-time low in March 2009.
The company’s current $0.068 monthly distribution corresponds to a $0.82 annualized payout and supports a yield of nearly 6.6%. Over the last nine years, GAIN has enhanced its total annual distribution 70%, which is equivalent to an average growth rate of 6.1% per year.
In addition to its regular monthly distributions, Gladstone also distributed three extra dividends in 2017, two in 2018 and one thus far in 2019. In addition to its rising dividend income distributions, the company has delivered a one-year asset appreciation of nearly 14%. The combined total return over the trailing 12-month period has exceeded 21.4%. Over the past three years, shareholders have enjoyed a total return of 70%. Additionally, Gladstone Investment Corporation’s shareholders have more than doubled their investment by acquiring a total return of nearly 130% over the past five years.
4 High Total Returns Gladstone Companies: #1
Gladstone Commercial Corporation (NASDAQ:GOOD)
Dividend Yield: 6.52%
The Gladstone Commercial Corporation is a publicly traded REIT that pays monthly cash distributions to its stockholders and invests in net leased industrial, commercial and retail real property. It also selectively makes long-term industrial and commercial mortgage loans.
The company’s current $0.125 monthly dividend amount corresponds to a $1.50 annualized payout and currently yields 6.52%. Robust asset appreciation over the last five years has suppressed the current yield below the company’s own 8% yield average. However, Gladstone Commercial Corporation current yield is more than twice the 3.04% average yield of the entire Financial sector. Additionally, GOOD’s current yield also outperformed the 6.29% simple average yield of the Closed-End Fund — Equity industrial segment.
While delivering only the third highest dividend yield in this group, the Gladstone Commercial Corporation’s asset appreciation of nearly 22% over the trailing months period helped overcome the dividend deficit to deliver a one-year total of nearly 29%. This is more than 34% higher than the sub-22% one-year total return for the stock that is in second place.
Had the list been sorted by the total returns over the last three or five years, the Gladstone Investment Corporation would have taken the top spot in both instances by a significant margin. However, in terms of one-year total returns, the Gladstone Commercial Corporation stands far above its Gladstone Companies peers.
Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.