Some income investors look for the highest-yielding dividend stocks while others feel more secure with lower-yielding stocks, provided the dividend is safe and consistently paid.
But investors should also consider how fast the dividend is growing because a fast-growing dividend can quickly boost the yield of one’s original cost basis and is usually an indicator of solid price appreciation over time.
Here are five REITs that have shown the highest dividend growth over the past five years, and just as importantly, without cuts nor interruptions of the dividend payments. Despite the difficulties for all REITs in 2022, all five have shown solid appreciation since 2017.
Rexford Industrial Realty Inc REXR is an industrial REIT that is based in Southern California’s high-growth areas. Rexford Industrial owns or manages over 250 properties.
Over the past five years, the quarterly dividend has grown from $0.145 to $0.315 per share, an increase of 117%. The most recent dividend yield was 3.1%. Rexford Industrial Realty stock is up 42% since 2017.
American Tower Corp AMT is a specialty REIT that has a presence in 222,000 global communication sites across six continents and 25 different countries.
In five years, the quarterly dividend has grown from $0.70 to $1.47, an increase of 110% and good for a 3.1% yield. American Tower has risen about 15% in that time.
Arbor Realty TrustInc ABR is a Long Island based mortgage REIT (mREIT) that initiates bridge and mezzanine loans for commercial and residential properties.
Over the past five years, Arbor Realty Trust’s quarterly dividend has grown from $0.19 to $0.39, an increase of 105%. The current yield of 12.7% is well above its five-year average yield of 9.04%. Arbor Realty Trust has appreciated 48% over five years.
Extra Space Storage, Inc. EXR is a Salt Lake City, UT self-storage REIT with over 2000 locations in 41 states as well as Washington, DC. It was founded in 1977 and has grown to be the second largest operator of self-storage facilities in the U.S. Since 2017, it has acquired $4.6 billion in new properties.
Extra Space Storage has grown its dividend from $0.78 to $1.50 over a five-year span, for an increase of 92%. The most recent yield was 3.6%. Extra Space Storage has also doubled in price during that time.
Tereno Realty Corporation TRNO is an industrial REIT that owns and operates 252 properties in six major coastal U.S. markets. Those areas are Miami, New York City, Washington D.C., Seattle, Los Angeles and San Francisco.
As per its website, Tereno Realty’s philosophy is that these markets all have large and growing populations, developed infrastructure for the rapid distribution of goods and significant physical and regulatory barriers to the development of competing properties.
Over the past five years, Tereno Realty’s quarterly dividend has grown from $0.22 to $0.40, an increase of 81%. Its most recent dividend yield was 3.0%. Tereno Realty stock has gained about 40% since 2017.
Investors should realize that while these five REITs have shown remarkable growth over the past five years, there is no guarantee that in the future the dividends will continue to grow to the same degree for any of these companies. However, in a universe of well over 200 REIT stocks, focusing in on the top five for growth, while getting outstanding appreciation, is a pretty good place to start.
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