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JOURNAL OF ACCOUNTING AND FINANCE
Effects of Monthly Dividend Payments: The Case of Realty
Income Corporation
Author(s): Olgun Fuat Sahin, Alireza Nasseh
Citation: Olgun Fuat Sahin, Alireza Nasseh, (2013) "Effects of Monthly Dividend Payments: The Case of Realty Income Corporation," Journal of Accounting and Finance, Vol. 13, Iss. 3, pp. 86 - 97
Article Type: Research paper
Publisher: North American Business Press
Abstract:
In this paper, we examine the effects of dividend payment frequency on Real Estate Investment Trusts
(REITs). Specifically, we investigate if a clientele effect exists for monthly dividend payments by REITs.
Results suggest that monthly dividend payments reduce the institutional ownership of outstanding
common stock of a REIT, meaning that individual ownership is relatively higher. In addition, we examine
if there are any agency cost effects of dividend payment frequency. The results of these tests indicate that
monthly dividend paying REITs are likely to have lower agency costs than REITs that pay in other
frequency forms. Finally, we compare Realty Income Corporation, a REIT with a long history of monthly
dividend payments, to REITs with similar property investment focus. Results of these comparisons are
consistent with the aggregate evidence.
