Investing in dividend stocks is an important aspect of my investment strategy. They allow me to generate passive income, which I use to increase my income by reinvesting the cash into purchasing more dividend-paying stocks. Historically, dividend-paying stocks have also outperformed non-dividend-paying ones, delivering an annualized return of 9.2%, up from 4.3% over the past 50 years, according to data from Ned Davis Research and Hartford Funds.
Dividend producers have produced the highest returns at 10.2% annualized, that's why I focus my attention on companies that can increase their payments. Real estate income (NYSE:O), Apartment Communities in Middle America (NYSE: LAND)and Vici Properties (NYSE: VICI) They have an excellent track record of increasing their dividends. They also offer higher dividend yieldsallowing me to generate more income for every dollar I invest. That's why I can't wait to buy more of each this October.
As consistent as they come
Real Estate Income Offers a very attractive dividend yield these days. The diversified real estate investment trust (REITs) has a payment greater than 5%. This is several times greater than the S&P 500 dividend yield less than 1.5%.
Where Realty Income stands out is in its ability to increase its dividend. The REIT has increased its payout 127 times since it went public in 1994, including for 108 quarters in a row. It has increased its dividend at a compound annual rate of 4.3%, contributing to its annualized total return of 13.5%.
Acquisitions are the main factor driving Realty Income's ever-increasing dividend. The REIT estimates that for every $1 billion of cumulative acquisitions does will add 0.5% to its adjusted funds from operations (FFO) per share each year. It plans to make $3 billion in property purchases this year, in addition to its $9.3 billion merger with fellow REIT Spirit Realty. With billions of dollars of commercial real estate, Realty Income should have no problem continuing to grow its portfolio, income, and dividends.
Improve your ability to increase your dividend
Mid-America Apartment Communities currently offers a dividend yield of over 3.5%. The apartment REIT has raised its payout for 14 straight years, including 5% at the end of last year.
The owner benefits from constantly increasing rental income. It owns apartment communities throughout the Sun Belt region, where the population and jobs are growing. at above average prices. That drives demand for housing, keeps occupancy levels high and rents rising at a healthy pace.
MAA also benefits from its investments to expand your apartment portfolio. For example, the REIT purchased a newly developed apartment complex in Raleigh, North Carolina. Meanwhile, it has seven new communities in development that it hopes to complete over the next few years. couple of years. It plans to start four or six more development projects in the next two years to continue expanding. These new additions will improve your ability to capitalize on rising rents, that should allow that continues to increase its dividend.
A smart strategy
Vici Properties' dividend yield exceeds 5%. The REIT, which focuses on ownership of experiential real estate such as gaming, hospitality and entertainment properties, has increased its payout by seven right years. That's every year since it became public. It recently increased its payout by 4.2% and has achieved a leading 7% compound annual dividend growth rate since 2018.
New investments are the main factor driving Vici Properties' rapid dividend growth. Has acquired experiential properties of operators in sale-lease transactionscompleted a merger with another large gaming REIT and invested in several development projects.
Vici Properties' credit investment platform helps open the door to new investment opportunities. For example, he converted a loan with Chelsea Piers into an acquisition of that property last year. Meanwhile, it recently agreed to finance the development of a Margaritaville Resort. As part of the deal, the REIT was given the option to purchase that property and several sports-related properties in the development. Vici Properties' expanding portfolio should boost its earnings, allowing the REIT to continue growing its dividend.
Stocks with high dividend growth
Realty Income, MAA, and Vici Properties offer high-yield dividends that have been steadily increasing. The REIT Trio seem Your payments will likely continue to increase. That's why I can't wait to increase my positions in October. This will allow me to collect more. the income these REITs produce while positioning my portfolio for above-average total returns over the long term.
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Matt DiLallo has positions in Mid-America apartment communities, Realty Income and Vici Properties. The Motley Fool posts and recommends apartment communities in Mid-America and Realty Income. The Motley Fool recommends Vici Properties. The Motley Fool has a disclosure policy.
I can't wait to buy more of these 3 top high-yield dividend stocks in October was originally published by The Motley Fool