Realty Income has increased its dividend at a 4.2% compound annual rate over the past three decades.
Mid-America Apartment Communities recently extended its dividend growth streak to 16 years in a row.
Rexford Industrial Realty has delivered a robust 15% compound annual dividend growth rate over the last five years.
10 stocks we like better than Realty Income ›
Investing in dividend stocks is a smart idea. They’ve historically delivered a much higher total return compared to non-dividend payers, with the best returns coming from dividend growers.
Many real estate investment trusts (REITs) have exceptional records of increasing their dividends. That’s one reason why REITs have outperformed stocks over the long term.
Realty Income(NYSE: O), Mid-America Apartment Communities(NYSE: MAA), and Rexford Industrial Realty(NYSE: REXR) stand out for their ability to consistently increase their higher-yielding dividends. Those features make them brilliant income stocks to buy for the long term right now.
Image source: Getty Images.
Realty Income is one of the most consistent dividend growth stocks in the REIT sector. The landlord has increased its monthly dividend payment 133 times since its public market listing in 1994, including the last 113 quarters in a row. It has grown its high-yielding payout (5.7% current yield) at a 4.2% compound annual rate. That has helped it deliver a robust 13.7% average annualized total return over the past three decades.
The REIT has one of the strongest financial profiles in the industry. It has a conservative dividend payout ratio at around 75% of its adjusted funds from operations. That gives it a comfy cushion while allowing it to retain lots of cash to invest in new income-generating properties.Realty Income also has one of the 10 best balance sheets in the REIT sector, giving it additional flexibility to continue expanding its portfolio.
Realty Income has no shortage of investment opportunities. It takes a diversified approach, investing in retail, industrial, gaming, and other properties across the U.S. and Europe secured by long-term net leases. It sourced $97 billion of potential investment opportunities through the third quarter of this year, 4% of which it closed, as it only moved forward with its best investment opportunities. With $14 trillion of real estate suitable for net leases across the U.S. and Europe, Realty Income has a very long growth runway.
Mid-America Apartment Communities recently extended its dividend growth streak to 16 years in a row. The REIT’s dividend now yields 4.5%. The apartment owner has never suspended or lowered its dividend in its more than 30 years as a public company. It has grown its payout at an above-average 7% compound annual rate over the last decade. This steady dividend growth has helped support an above-average 9.6% compound annual total shareholder return over the past 20 years.
Story Continues
The REIT is in an excellent position to continue increasing its dividend. It has a low dividend payout ratio and a top-tier balance sheet. This provides it with tremendous financial flexibility to support development projects and make acquisitions as opportunities arise.
Mid-America Apartment Communities currently has seven communities under development, representing nearly $800 million of investment that it expects to complete over the next few years. The REIT also has a large pipeline of future development projects. It also recently spent nearly $100 million on a stabilized apartment community in Kansas City. Additionally, it bought land adjacent to that property and another parcel in Arizona to support future development projects.
Rexford Industrial Realty has grown its dividend at an impressive 15% compound annual rate over the past five years. The industrial REIT focused on Southern California currently has a 4.2% yield.
Rising rents, development projects, and acquisitions have driven dividend growth over the past few years. The REIT already has a lot of future growth embedded within its existing portfolio.
Existing leases will escalate rents at a 3.7% average annual rate over the next few years, adding $105 million in incremental net operating income (NOI). Additionally, the company has several repositioning and redevelopment projects under construction or in the lease-up phase, which should add another $70 million in annual NOI as they stabilize. The REIT also anticipates capturing higher lease rates as legacy leases expire, driven by faster market rent growth, which could conservatively add another $20 million to its NOI. Add it up, and that’s $195 of additional income from its existing portfolio, a 28% increase from its current annualized rate before making any additional accretive acquisitions. Given this embedded growth, Rexford should have no trouble growing its dividend payment in the future.
Companies that increase their dividend payments have historically been wise investments. Realty Income, Mid-America Apartment Communities, and Rexford Industrial Realty have excellent records of raising their dividends, which seems likely to continue. That makes them look like brilliant high-yielding dividend stocks to buy and hold long term right now.
Before you buy stock in Realty Income, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Realty Income wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $509,039!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,109,506!*
Now, it’s worth noting Stock Advisor’s total average return is 972% — a market-crushing outperformance compared to 193% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of December 15, 2025
Matt DiLallo has positions in Mid-America Apartment Communities, Realty Income, and Rexford Industrial Realty. The Motley Fool has positions in and recommends Mid-America Apartment Communities and Realty Income. The Motley Fool has a disclosure policy.
3 Brilliant High-Yield Dividend Stocks to Buy Now and Hold for the Long Term was originally published by The Motley Fool
-1024x683.jpg "Judge Who Helped Violent Illegal Alien Evade ICE Faces New Test")
-1024x683.jpg "Montana Puts Democrats in a Bind as Senate Hopes Fade")
