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The 5 REITs With the Longest Dividend Histories

CEO Khai Intela
With a long history of consistently increasing dividends, these five real estate investment trusts (REITs) should be on every income investor's radar. Federal Realty Investment Trust, Universal Health Realty Income Trust, National Retail Properties, Realty...

With a long history of consistently increasing dividends, these five real estate investment trusts (REITs) should be on every income investor's radar. Federal Realty Investment Trust, Universal Health Realty Income Trust, National Retail Properties, Realty Income, and Essex Property Trust have all demonstrated their commitment to prioritizing investors. Let's take a closer look at each of them.

1. Federal Realty: The King

Federal Realty is the reigning king when it comes to dividend increases, with an impressive 54 consecutive years of annual dividend growth. This makes it the longest streak among publicly traded REITs and positions it as a leader among Dividend Aristocrats. Although its portfolio may be smaller compared to other mall REITs, Federal Realty focuses on high-quality properties in affluent neighborhoods with substantial populations. Its strategy includes redevelopment efforts to maximize asset potential and achieve optimal prices upon sale. With a current yield of approximately 3.4%, Federal Realty is an attractive option for investors seeking reliable dividend stocks.

2. Universal Health Realty Income Trust: A Big Change of View

Universal Health Realty Income Trust boasts a dividend yield of nearly 5%, making it quite generous compared to the broader market. What's even more intriguing is the significant shift in investor perception, evident from the yield hovering just above 2% at the beginning of 2020. Despite 36 consecutive years of dividend increases, some concerns persist. The REIT is externally managed by one of its largest tenants, Universal Health Services, and its dividend growth has been relatively modest. Additionally, certain property-level issues have raised investor worries. Nevertheless, for conservative investors looking to expand their knowledge and diversify their portfolio, Universal Health Realty Income Trust is worth a deeper exploration.

3. National Retail Properties: Net Lease King No. 1

When it comes to dividends in the net-lease segment, National Retail Properties reigns supreme with an impressive 33 consecutive years of annual dividend increases. As a net-lease REIT, National Retail Properties focuses on single-tenant properties, with tenants responsible for most operating costs. This investment approach significantly reduces risk, particularly when spread across nearly 3,200 properties. National Retail Properties primarily acquires retail assets in strong locations, targeting buildings that are easy to lease even in worst-case scenarios. Its conservative yet steady approach has kept dividend growth on par with historical inflation rates. With a yield of almost 4.9%, National Retail Properties is an attractive prospect for conservative investors.

UHT Dividend Chart UHT Dividend data by YCharts

4. Realty Income: Net Lease King No. 2

Realty Income may have fewer annual dividend increases than National Retail Properties, but its position as the industry bellwether cannot be denied, boasting a portfolio of over 10,000 properties. While its dividend streak stands at 28 years and counting, Realty Income remains a Dividend Aristocrat. Approximately 80% of its portfolio consists of retail properties, with the remainder in industrial and warehouse assets. The company has also been expanding its reach in the European market, offering potential growth opportunities. Realty Income's diversification makes it an excellent choice for investors seeking a net-lease REIT. With a yield of about 4.3% and a monthly dividend payment schedule, it is particularly suited for conservative investors.

5. Essex Property Trust: The West is the Best?

Essex Property Trust focuses on apartments in California and Washington, operating in eight specific submarkets. While this concentration may not appeal to all investors, the REIT has benefited from the tech sector's robust growth in these regions. This success is reflected in its impressive record of 27 consecutive annual dividend increases. Despite pandemic-related risks, Essex Property Trust has outperformed its more diversified apartment REIT counterparts in terms of net operating income growth. As long as the West Coast remains a hub of technology innovation, Essex Property Trust's dividend is likely to remain secure. With a yield of 2.5%, this Dividend Aristocrat presents an interesting opportunity for investors willing to conduct further research.

A Little Bit of Everything

These REITs have worked diligently to achieve their Dividend Aristocrat status, reflecting their commitment to prioritize investor dividends. Each REIT brings its unique characteristics and advantages to the table. Even the net-lease REITs, National Retail Properties, and Realty Income, offer distinct value propositions and merit consideration. By researching industry leaders like these, investors can gain valuable insights into what to look for in their own investment portfolios. Whether you choose to add these REITs to your holdings or simply compile a wish list, studying their success stories can provide valuable lessons for your investment journey.