Investing in dividend stocks represents a smart long-term strategy. Data from Hartford Funds and Ned Davis Research shows that, over the last 50 years, the average stock that pays dividends has outperformed those that do not by more than 2-to-1. The highest returns have been achieved by dividend growers, boasting an average annual total return of 10.2%.
Prologis(PLD 1.14%), Realty Income (O -0.24%), and Mid-America Apartment Communities (MAA 0.26%) are recognized for their consistent dividend growth. With promising future growth, they are excellent picks for long-term investment.
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Sustained Growth Expected
Prologis has consistently increased its dividend over the years. As a leading industrial REIT, it has raised its payouts annually for over a decade, achieving a compound growth rate of 13% in the past five years. This rate significantly surpasses the S&P 500’s 5% and the 6% growth seen in other REITs.
The ongoing growth of Prologis’ dividend has resulted in 13.6% annualized total returns for its investors over the last decade. With a current yield nearing 4%, it significantly outpaces the S&P 500, which yields less than 1.5%. The industrial REIT is well-positioned for future dividend increases, generating consistent cash flow backed by long-term leases with escalation clauses.
A Commitment to Dividends
Realty Income specializes in providing a reliable and growing monthly dividend for its investors. The diversified REIT has made significant strides in this mission, increasing its dividend 131 times since becoming public in 1994 and maintaining growth for 30 consecutive years. Its compound growth rate since becoming public is 4.2%, resulting in total annual returns averaging 13.6%.
Realty Income is also positioned well for future dividend increases with a yield of over 5.5%. Its conservative payout ratio of about 75% of stable cash flow allows for ample cash retention to fund additional investments in income-generating properties.
Capitalizing on Rental Demand
Mid-America Properties stands as one of the largest apartment owners in the U.S., focusing on multifamily units in the rapidly growing Sun Belt region, where rising population and job growth drive rental demand.
This increasing demand is anticipated to support rent growth across its existing properties and aid in the development of new apartment projects. Currently, Mid-America has seven development projects in progress expected to stabilize by the end of 2027, with plans to start additional projects this year. The company’s reliable rental income should enable continued dividend growth, reflecting a 7% annual compound growth rate over the past decade.
Smart Dividend Investments
Prologis, Realty Income, and Mid-America Apartment Communities exhibit outstanding records of dividend payments and consistent increases, contributing to their impressive total returns. With anticipated future growth, these stocks are strong candidates for long-term investment strategies.
