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Some real estate investment trusts (REITs) are generous dividend payers, and Agree Realty (NYSE: ADC) certainly fits this description. However, with a little digging, you may discover an off-putting irregularity in Agree Realty's prior payout pattern.

This need not be a deal breaker, though. Considering the context of Agree Realty's past payment pullback should help restore confidence in this recent dividend grower.

What's the dividend payment for Agree Reality stock?

Agree Realty, which derives revenue from bricks-and-mortar retail properties, stands out because the company pays dividends every month. Since this year's first quarter, Agree Realty has distributed $0.247 per share in dividends, reflecting an annualized dividend of $2.964 per share, assuming no dividend cuts occur. This expected payout is 2.9% greater than the annualized dividend of $2.88 per common share that commenced in the first quarter of 2023.

That amount might not seem like much for a $60-something stock, but we're talking about just under $0.25 every month here. This translates to a forward annual dividend yield of 4.74%, which compares favorably to the real estate sector's average dividend yield of 3.91%.

An aberration, and an explanation

In early 2022, Agree Realty changed its per-share dividend distributions from $0.23 per quarter to $0.23 per month, effectively tripling its dividend distribution. However, in 2011, the company slashed its quarterly dividend distributions from $0.51 to just $0.40 per share.

Back then, bookstore chain Borders accounted for a whopping 20% of Agree Realty's rent roll. Borders ended up filing for bankruptcy in 2011, and as you would expect, the financial pressure forced Agree Realty to cut its dividend payments.

Hopefully, that was a one-off event and Agree Realty won't face any Borders-like disasters in the coming months. Today, Agree Realty derives income from established renters like Walmart, Dollar General, and Tractor Supply and its number of properties under management is more than 26 times larger and far more diverse. This should reassure income seekers that Agree Realty can continue to maintain its monthly payment pace.

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David Moadel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool recommends Tractor Supply. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.