Dividend Kings In Focus: Federal Realty Investment Trust

Updated on July 8th, 2025 by Felix Martinez

Stocks with very long streaks of dividend increases are appealing because they generate stable earnings and pay reliable dividends, even during recessions.

Not many companies remain resilient during economic downturns, so investors must exercise caution when selecting dividend stocks to own for the long term.

One group of stocks that has stood the test of time is the Dividend Kings, a set of just 55 stocks with at least a half-century of consecutive dividend increases.

You can see all 55 Dividend Kings here.

You can also download an Excel spreadsheet with the full list of Dividend Kings (plus important metrics such as price-to-earnings ratios and dividend yields) by clicking on the link below:

Federal Realty Investment Trust (FRT) is a Dividend King that has 57 consecutive years of dividend increases.

This streak would be impressive for any stock, but it is extraordinary for a REIT (a sector notoriously susceptible to recessions).

In fact, Federal Realty is the only REIT on the Dividend Kings list.

Below, we’ll examine Federal Realty’s business and its prospects for continuing its dividend streak.

Business Overview

Federal Realty was founded in 1962 and has since grown into a large retail-focused REIT operating in high-income, densely populated coastal markets in the U.S.

Related: You can see Sure Dividend’s REIT list here.

The trust sees favorable demographics for the long term, with population and income growth expected in these markets.

Source: Investor presentation

This strategy of owning premium properties in premium markets has served the trust well, and it has grown steadily over the years.

Federal Realty also has a highly diversified property portfolio. No single tenant represents more than 2.6% of Federal Realty’s annualized base rent or ABR. It has only 7 tenants with exposure greater than 1%.

Federal Realty has more than 3,500 tenants across 103 properties, representing a high level of diversification in terms of both tenants and geographic markets.

Growth Prospects

Federal Realty Investment Trust reported Q1 2025 net income available for common shareholders of $61.8 million ($0.72 per diluted share), up 12.8% from $54.7 million ($0.66 per diluted share) in Q1 2024. Funds from operations (FFO) increased 7.2% to $146.5 million ($1.70 per diluted share) from $136.7 million ($1.64 per diluted share). Operating income rose 7.9% to $108.1 million from $100.2 million. Comparable property operating income (POI) grew 2.8%, excluding lease termination fees and prior period rents.

Operational highlights included a comparable portfolio occupancy of 93.6% (up 180 basis points year-over-year, down 10 basis points sequentially) and a leased rate of 95.9% (up 160 basis points year-over-year, down 20 basis points sequentially). Small shop leased rate was 93.5% (up 210 basis points year-over-year), and the anchor tenant leased rate was 96.8%. The company signed 91 leases for 429,865 square feet, with comparable space leases achieving 6% cash basis rollover growth.

Federal Realty acquired Del Monte Shopping Center for $123.5 million and extended its $600 million unsecured term loan to March 2028, with an option to increase to $750 million. Liquidity stood at nearly $1.5 billion. A $1.10 per share quarterly dividend was declared, payable July 15, 2025. The company raised its 2025 FFO guidance to $7.11–$7.23 per share (6% midpoint growth) while maintaining EPS guidance of $3.00–$3.12. CEO Donald Wood emphasized portfolio resilience and strong leasing, positioning the company for sustained growth in affluent markets.

Federal Realty’s growth moving forward will comprise a continuation of higher rent rates on new leases, as well as its impressive development pipeline fueling asset base expansion. Margins are expected to continue rising slightly as the company redevelops parts of its portfolio, and same-center revenue is expected to continue increasing.

Competitive Advantages & Recession Performance

Federal Realty’s competitive advantage is in its development pipeline and its focus and relative dominance of very attractive markets.

The trust has demonstrated that, over time, it can produce industry-leading average base rents, as it has proven extremely adept at selecting and developing the best properties in the U.S.

Another competitive advantage is the trust’s strong balance sheet, which stands out among REITs. FRT has a solid credit rating of BBB+ from Standard & Poors, and Baa1 from Moody’s. It also has sufficient liquidity, with $103 million in cash at the end of the second quarter.

Federal Realty’s FFO-per-share during the Great Recession can be seen below:

2007 FFO-per-share: $3.62
2008 FFO-per-share: $3.85 (6.4% increase)
2009 FFO-per-share: $3.51 (8.8% decrease)
2010 FFO-per-share: $3.88 (10.5% increase)

The REIT experienced only a slight decline in FFO per share in 2009 and quickly recovered after the recession ended.

Federal Realty expects to generate an FFO-per-share of $7.16 in 2025, using the midpoint of guidance. As a result, the REIT is expected to have a dividend payout ratio of 62% for 2025, based on FFO per share.

This indicates a sustainable dividend for a REIT. There is also sufficient room to continue increasing the dividend each year going forward.

Valuation & Expected Returns

At the current share price of $94, and using $7.16 in expected FFO-per-share for 2025, FRT stock is trading at 13.1 times FFO estimates. Meanwhile, our fair value P/FFO estimate for Federal Realty is 12, so we view the stock as overvalued at this time.

If the P/FFO ratio contracts to 12 over the next five years, annual returns would be decreased by approximately 2.4% per year. Therefore, valuation is expected to be a headwind to FRT’s future returns.

In addition, FRT has projected FFO per share growth of 4.0% annually, complemented by its current high dividend yield of 4.7%. Total returns are expected to reach 6.3% per year over the next five years.

Fortunately, FRT stock still has wide appeal as a dividend growth investment.

Source: Investor Presentation

The trust has an unparalleled track record among REITs in terms of dividend growth.

Overall, the expected annual returns above 6.3% warrant a hold recommendation from Sure Dividend for FRT.

Final Thoughts

Federal Realty has faced challenges over the years, including multiple recessions and the coronavirus pandemic. Despite these, Federal Realty maintains a 57-year history of annual dividend increases, a feat unmatched in the REIT sector.

Given the trust’s business model, FFO per share growth should be reasonably strong. The dividend payout appears secure.

We rate shares of Federal Realty as a hold due to the expected annual returns of 6.3% or more.

The following articles contain stocks with very long dividend or corporate histories, ripe for selection for dividend growth investors: