I’m not an activist investor.
These people use their wealth, power, or influence to force their decisions upon a company – whether they want it or not. It can create a lot of friction among leadership and isn’t always done for the right reasons.
Besides, I have no desire to raise capital or get into proxy fights with management teams over mergers and board seats.
But given my conversations with many CEOs and board members, I do enjoy being the voice for average investors simply looking to retire in comfort.
It pays to have a voice in the room. And because of my connections up and down Wall Street, I’m happy to assume that role.
That’s why I consider myself to be a “suggestivist” investor.
I may be a multimillionaire now. But if you’ve been following me for a while, you know I made my fortune, lost it all, and painstakingly rebuilt my wealth over time. All with the help of a generous serving of humble pie and dividend growth stocks. If you want a refresher, check out my previous article here.
That’s why here at Intelligent Income Daily, sustainable shareholder returns are always the front and center focus of our research. We want to make sure that the companies we follow are accountable to the shareholders that choose to trust them with their hard-earned wealth.
And it’s why one of my goals is to advocate for shareholder-friendly decisions whenever I meet business leaders.
What they do with that advice is up to them… It’s their company, of course. And they’re responsible for its growth, profitability, and overall success.
But sometimes, they’ll realize their interests align with the ones I highlight.
Today, I’ll share a story about the significance of my role as a “suggestivist” middleman for shareholders. And tell you about an opportunity on my radar that could benefit from another suggestion I shared with a well-known management team…
A Voice for the Shareholders
One of my favorite features of real estate investment trusts (REITs) is that they collect monthly rent checks.
And since most of us have recurringly monthly expenses or budget on a monthly timeline… Getting a monthly dividend payment from a reliably growing REIT would fit right into that cycle.
Not only that, but for those who are reinvesting their dividends, a more frequent payment – even if it’s in smaller batches – helps them compound their wealth faster.
Take the example of Realty Income (O). Back in February, it announced its 632nd consecutive monthly dividend. It even raised its payment for the 119th time since it became a publicly traded company back in 1994.
And dividend investors love this stock. Since going public, it’s up 665%.
I gushed about the success of this model for years to Joey Agree, the CEO of Agree Realty (ADC), and his father, the CEO before him.
Agree Realty is a retail REIT that has grown into one of the largest and highest-quality REITs in the entire real estate sector.
But for a long time, I thought one major upgrade was missing. It was still paying out a quarterly dividend to shareholders.
I interviewed these two men on a regular basis for years. I would listen to their updates on the management team and ask questions as a part of my due diligence while covering Agree Realty.
I knew the company had ambitions to grow into a sizable competitor of Realty Income. So at the end of every meeting, I always suggested they bring up the possibility of switching to a monthly dividend during their next board meeting.
Finally, in 2020, Agree Realty announced it was transitioning from the larger quarterly payment to a smaller monthly payment at the start of the next year.
To Joey Agree’s credit, he listened, looked into it, and made the change beneficial to both his shareholders and the bottom line of the overall company.
Since then, the company has increased its dividend five times. And shares are up over 18%.
Bridging the Gap
Great management teams listen to the feedback of their shareholders.
Granted, not everyone who makes a request has the company’s best interest in mind. And not all feedback provides a step in the same direction management wants to go.
But an open dialogue helps shareholders understand the reasoning behind a company’s “no” or “not now” response.
This is one of the great privileges I have when I interview CEOs and board members. I get to take my subscribers’ questions to my meeting and be a part of that dialogue back and forth. It helps bring a level of transparency to both sides.
Shareholders are more likely to understand the reasoning behind management decisions. And the management team better understands the concerns and desires of their shareholders…
Bridging this gap is so important. It allows shareholders to reap the benefits like better dividend policies, while the company can attract more investors with its shareholder-first policies and grow further.
And while I can’t force anyone to do anything like activist investors, as a “suggestivist,” I can – and will continue to – advocate for shareholders.
So if you have questions for any CEOs, write in to us here.
I might even publish some of my “suggestivist” recommendations in these pages in future issues.
And for paid readers of my Intelligent Income Investor advisory, look out for another “suggestivist” story in tomorrow’s monthly issue.
This time, I spoke with a well-known billionaire investor… And the actions our conversation may have inspired could mean a rare chance to get involved in a sector that plenty of other billionaires are also currently piling into.
If you’re interested in reading this story and learning more about this latest recommendation, click here to learn more about my dividend newsletter, Intelligent Income Investor.
Happy SWAN (sleep well at night) investing,
Editor, Intelligent Income Daily