Real Estate Investment Trusts (REITs) can be great vehicles to diversify a dividend portfolio through exposure to the real estate market. Each of these companies are required to payout 90% of its income to shareholders. This is just one of the factors that changes the way REITs should be evaluated for investment qualification.
There are over 150 REITs that trade on the Nasdaq, NYSE and AMEX that yield 2% or more. I’ve created a full list which you can view here. Although that list has a 2 and 3 year dividend growth column it lacks a column for years of consecutive dividend growth.
Very few REITs have been able to increase dividends for each of the last 7 years or more. I give a big head nod to any company that was able to raise dividends before, during and after the great recession. That was the basis for the overall highest yielding post I did earlier this month.
REITs that have had this many consecutive dividend increases are usually more invested in physical real estate assets and less likely to be profiting from Mortgage Backed Securities. MBS REITs can be less predictable and closely tied to rates which as we all know change often and have a big impact on Mortgage REIT income.
The List
REITs with 7+ Years of Consecutive Dividend Increases:
| REIT | Symbo | Yrs of Div Increases | Dividends Since | Yield |
|---|---|---|---|---|
| Federal Realty Trust | FRT | 45 | 1999 | 2.8 |
| HCP Int | HCP | 19 | 1990 | 4.6 |
| National Retail Prop | NNN | 19 | 1990 | 4.6 |
| Universal Health Real | UHT | 19 | 1990 | 5.8 |
| Tanger Factory Out | SKT | 19 | 1993 | 2.7 |
| Essex Property Trust | ESS | 18 | 1994 | 3 |
| Realty Income | O | 15 | 1994 | 5.2 |
| Urstadt Biddle Prop | UBA | 14 | 1998 | 5 |
| Senior Housing Prop | SNH | 11 | 1999 | 6 |
| Omega Healthcare Inv | OHI | 9 | 1992 | 5.9 |
| Digital Realty Trust | DLR | 7 | 2004 | 5.1 |
| Equity LifeStyle | ELS | 7 | 1993 | 2.5 |
Did I miss any? Let me know in the comments.
Pretty decent yields on some of these. I was always taught to be wary of yields that are much above 5%. Any concerns about some of those higher ones?
Hi Nick,
That rule of thumb applies to normal dividend stocks but not to REITs. It is normal for REITs to have higher yields. The fastest way to check is to look at a companies 5 year average yield. Also check to make sure the stock price hasn’t recently had a big drop. But if a company has a solid history of year over year dividend growth the higher yield is not a red flag. Thanks for stopping by.
I’m looking to get some more exposure to real estate through some REITs. I have a small position with O but it’s a start.