Dividend-paying stocks can be great long-term investments. Over the past 50 years, the average dividend stock has outperformed the equally weighted stock. S&P500 index, the best overall returns come from companies that produce growing dividends.
REIT tends to be stocks with high dividend growth. Agree with real estate (NYSE:ADC), Rexford Industrial Real Estate (NYSE: REXR)And Invitation houses (NYSE:INVH) are among many REITs with an excellent track record of consistently increasing their dividends. This makes them easy purchases for those who have a little a little of money to put to good use now.
Stability pays off
Agree Realty has increased its dividend at a compound annual rate of 5.6% over the past decade. THE Retail REITs currently pays a monthly dividend this yields almost 5%, several times higher than the 1.3% dividend yield of the S&P 500. To put that in perspective, an investor can generate almost $5 in annual dividend income for every $100 invested in the REIT . That compares to just over $1 in annual dividend income from an S&P 500 index fund.
The REIT has properties net rented Or rented land to financially strong retailers. These rental structures give it very stable cash flow. It typically pays less than 75% in dividends. This provides him with a healthy cushion that he can use to reinvest in additional income-generating properties.
Agree that Realty typically purchases properties from existing business partners in sale and leaseback transactions. It also provides financing to develop new properties. Its partners currently own more than 165,000 properties, giving the REIT, which has about 2,200 locations, a long runway for growth.
Focus pays off
Rexford Industrial Realty is a Industrial REIT focused exclusively on the Southern California logistics market. It owns more than 400 properties in a region where supply is limited and demand is high. This keeps vacancy rates low while leading to strong rent growth.
The FPI’s targeted strategy has borne fruit. Its profit has grown at a compound annual rate of 15% over the past five years, driven by rental growth, acquisitions and repositioning and redevelopment projects. This has allowed the REIT to increase its dividend at an average annual rate of 18% over the past five years. These rates are well above its peer group average of 11% for profits and 10% for dividends.
Rexford should be able to grow its profits and its dividend, which yields nearly 4%, at a healthy pace in the coming years. The REIT estimates that integrated rental growth, recent acquisitions and investments to reposition and redevelop existing properties are expected to increase its net operating income by 47% over the next three years. In addition to this, it has a strong financial profile, giving it great flexibility to continue making new investments in the years to come.
The strategy is paying off
Invitation Homes is a Residential REIT focused on single-family rental homes. He owns or has an interest in nearly 90,000 homes and manages 17,000 others on behalf of third-party owners. These properties are in 16 markets where populations and jobs are growing at above-average pricesand supplies are limited, making buying much more expensive than renting. These factors maintain a high occupancy rate and lead to strong rental growth.
In addition to rent growth, Invitation Homes is steadily expanding its portfolio. She buys homes from several sources, including builders. It recently agreed to buy an additional 500 new homes that it is expected to begin taking possession of later this year, including some of the 1,000. waits close by the end of the year. It also launched a third-party management platform earlier this year, which is growing rapidly. It recently added 4,000 homes to this platform as part of a joint venture investment.
Rising rents and a growing portfolio should allow Invitation Homes to continue to increase its dividend. It increased its payout by almost 8% earlier this year and has increased it by more than 250% since its 2017 IPO.
Great Dividend Stocks
REITs can be great dividend stocks. This has certainly been the case for Agree Realty, Rexford Industrial Realty and Invitation Homes. over the years. With stronger dividend growth likely, they seem it’s obvious buying right now. Given their higher yields, they can generate more income for every dollar invested, making them perfect for those who don’t have a lot of money to invest right now.
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Matt DiLallo holds positions in Invitation Homes and Rexford Industrial Realty. The Motley Fool has positions and recommends Invitation Homes and Rexford Industrial Realty. The Motley Fool has a disclosure policy.
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