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Monmouth REIT: Backdoor Play on FedEx

NEW YORK (TheStreet) -- Shipping giant FedEx Corp. (FDX) boasts a market capitalization of more than $27 billion and revenue of more than $42 billion. It's second only to UPS (UPS) in market capitalization.

The downside of this consistent performer is its 0.60% dividend yield -- not quite the material of income investors.

Enter Monmouth Real Estate Investment Corp. (MNR). Organized in 1968, this is a publicly owned real estate investment trust specializing in net-leased industrial properties subject to long-term leases primarily to investment grade tenants.

Monmouth Real Estate Investment's current tenants include FedEx, Anda Pharmaceuticals, Anheuser-Busch Inbev SA (BUD), Best Buy (BBY), Caterpillar Logistics Systems, Coca-Cola (KO), Kellogg (K), Mead Paper, Sherwin-Williams (SHW) and Siemens (SI).

So what does this triple-net-lease industrial REIT have to do with FedEx? A concentration of the company's properties are leased to FedEx.

As of March 31, 2012, approximately 3.5 million square feet, or approximately 42% of the company's property, was leased to FedEx or one of its subsidiaries.

In other words, FedEx supports this REIT with both its creditworthiness and its contractual leases. This, to a degree, makes Monmouth a backdoor play on FedEx.

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