How To Make Passive Income With Amazon Stocks
Written by
Gabriel Vito
Edited by
Daria Uhlig
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If you had invested $1,000 in Amazon stock 10 years ago, you’d be sitting on roughly $10,000 today. But despite that 850%-plus gain, your investment wouldn’t be earning you passive income. That’s because Amazon isn’t a dividend stock.Â
While you can’t earn passive income with Amazon stock, you can earn it by investing in a dividend-paying company that benefits from Amazon’s success. Its landlord, a real estate investment trust, is that kind of company.
What’s a REIT?
A REIT is a company that owns, operates or finances income-producing real estate. REITs are an appealing security for investors who want to invest in large-scale real estate portfolios without directly owning property. By investing in REITs, you can earn dividends from real estate without the hassles of property management or large capital requirements.
Stag Industrial: A Connection to Amazon
Stag Industrial (STAG) is a REIT that specializes in industrial properties, and Amazon is its tenant. You could make the argument that your investment in Amazon is an investment in Stag Industrial, but you’ll have to invest directly in Stag to benefit from the association.
STAG is a $9.8 billion fund that owns 570 buildings in 41 states. And its status as a REIT requires that it pay out 90% of its net taxable income to shareholders.
Priced at $35.22 as of May 3, shares earn an annual dividend of $1.48, paid monthly, which represents a 4.23% yield. These distributions provide a steady source of passive income – something that direct Amazon stockholders do not get.
Getting Started with REITs
Investing in REITs like Stag Industrial can be a practical alternative for those looking to generate passive income from their investment in Amazon. Because the REIT is publicly traded, you can purchase shares from just about any brokerage — in many cases, commission-free.
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