When income stock investors consider purchasing a real estate investment trust (REIT), they look for two distinct characteristics. For example, investors examine and consider the safety and reliability of the dividend to ensure intelligent investing of the stock and prevent a financial loss. The safety part comes from how well covered the dividend is by the company’s funds from operation (FFO). The reliability factor comes from the historical pattern of dividend payments. Therefore, potential investors must research the REIT historical report when investing.
Here is a closer look at three of the most reliable dividend REITs.
Federal Realty Investment Trust (NYSE: FRT)
Based in North Bethesda, Maryland, this diversified REIT holds a portfolio that contains office buildings, residential units, and shopping malls. Federal Realty Investment Trust was established in 1962 and is one of the oldest REITs on Wall Street. In addition, Federal Realty Investment is a member of the S&P 500, making it a reliable stock and likely to perform favorably for investors. The trust owns 105 commercial properties that contain around 3,100 tenants as well as 3,400 residential units. The West or East coasts of the United States hold most of the assets of Federal Realty Investment Trust.
Holds The REIT Record For Annual Dividend Increases
One of the most exciting things to consider about Federal Realty Investment Trust is that it currently holds the record for REIT annual dividend increases – which dates back 55 years and is still happening. The recent quarterly dividend increased to $1.08 from $1.07. In addition, the annual dividend of $4.32 now has a yield of 4.7 percent. It is also well covered by the annual FFO. Estimates of the most recent occurred at a range of between $6.10 and $6.25. The Jefferies Financial Group updated its Q3 earnings-per-share (EPS) estimates for FRT on October 19, 2022. The bump went from $1.52 to $1.53, making FRT the most likely reliable dividend provider in the REIT stock world.
Realty Income Corp. (NYSE: O)
Although they are a retail REIT, Realty Income Corp. considers itself the Monthly Dividend Company. The trust owns and operates more than 11,400 commercial properties with long-term net lease contracts. The tenants of these locations are typically large, well-known retail companies. For example, some include Walmart Inc., FedEx Corp., Dollar General Corp., Lowe’s Cos. Inc., 7-Eleven Inc., Walgreens Co., and CVS Pharmacy Inc. Find out more about CVS for sale by visiting Pharma Property Group.
Investors Rely On The Reliability of the Company
Again, Realty Income Corp. is a member of the S&P 500, belongs to the Dividend Aristocrats Index, and has provided dividend income to shareholders for the past 53 years. The dividend amount has increased 117 times since it went public in 1994. The latest quarterly FFO of 0.99 cents per share quickly covers the $0.745 quarterly dividend. The annual income yield sits at 5.1 percent for $2.98. The safety and reliability that comes from Realty Income Corp. make this a solid investment that will likely continue to produce steady and consistent results.
National Retail Properties Inc. (NYSE: NNN)
This REIT is similar to Realty Income Corp. as it owns a diversified group of brand-name retail outlets. For example, some well-known retail outlets include tenants such as Camping World Holdings Inc., Best Buy Co. Inc., BJ’s Wholesale Club Holdings Inc., and 7-Eleven. National Retail Properties Inc. has an occupancy rate of over 99 percent. The average lease term is currently over ten years.
The Power of Consistency Is Profound
The statement that the power of consistency is profound greets you when you visit the National Retail Properties Inc. website. It sums up what investors can expect from the REIT. With this in mind, it should be no surprise that the dividends offered by this REIT have consistently increased over the past 33 consecutive years. The most recent quarterly dividend was $0.55, which was covered easily by a quarterly FFO of $0.77. Also, the dividend offered by National Retail Properties Inc. has increased by 15.7 percent over the past five years. The dividend yield is currently 5.5 percent which translates to safety and consistency – characteristics that investors seek.
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Final Thoughts
The retail net-lease sector is challenging for investors to get a foothold. However, the offerings are attractive, with long-term leases with top-tier brand-name tenants. With a REIT, investors can realize many benefits with minimal risk thanks to these investment opportunities’ safety and consistency level. The best part is that because these are so reliable, inexperienced investors can find success by dipping their toes into the net lease pool. If you are pursuing a REIT with a solid, regular dividend, consider the three above are great choices.
