It's common knowledge that dividend stocks can help investors build wealth and generate passive income. However, not all dividend stocks are created equally and only 68 have earned dividend aristocrat status. Despite the REIT sector's solid performance history, only three REITs are certified dividend aristocrats. Keep reading to find out which ones.
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How Do Stocks Achieve Dividend Aristocrat Status?
Achieving Dividend aristocrat status requires stocks to hit several key metrics in terms of longevity, performance and name recognition. First, the company issuing the stock must have a market cap of $3 billion and an average daily trading activity of $5 million. Second, the company must be a member of the S&P 500. Finally, it must have increased its paid shareholder dividend for at least 25 consecutive years.
Federal Realty Investment Trust (NYSE: FRT)
Federal Realty Investment Trust is a large operator of shopping centers and retail hubs in America's largest metropolitan areas. This REIT owns and operates over 26 million square feet of retail space but has also diversified into the residential sector, where it has 3,100 multifamily units under management.
Federal Realty Investment's market cap is an impressive $9.46 billion and its shares are trading in the $113 range. The stock's price has been surging for much of 2024 and it's paying a dividend of 3.85%.
That's $4.35/share and Federal Realty Trust has been increasing its dividend for 50 consecutive years. That means this REIT is one of the very rare stocks that has attained both dividend king and dividend aristocrat status. Federal Realty Investment Trust's performance history makes it an offering worthy of strong consideration from dividend investors.
Essex Property Trust (NYSE: ESS)
Essex Property Trust is one of America's largest multifamily residential REITs. It owns and operates 254 separate assets that total 62,000 units. More importantly for Essex investors, most of its portfolio assets are in America's most expensive West Coast rental markets. The high home prices create an ideal scenario for Essex investors because most residents in these markets have no choice but to rent.
That helps explain Essex's impressive performance history and its estimated $19.66 billion market cap. Essex shares are currently trading at $312.51 and paying a dividend of 3.14%, which is $9.81/share. Essex's long-term future looks solid as long as the average home price in California is in the high six figures.
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Realty Income (NYSE: O)
Realty Income has transcended Dividend Aristocrat status and entered the rarified air of dividend king. This REIT specializes in triple-net-leased retail properties in free-standing buildings suited for big-box retailers, who usually make reliable tenants and sign long-term leases. The Realty Income portfolio includes 15,000 properties in 49 states and it has recently diversified into the gaming, industrial and distribution sectors.
Realty Income's current market cap is $53.67 billion and its shares are trading at $61.63. Lately, Realty Income's share price has been moving steadily upward on the strength of solid Q2 2024 earnings. The estimated current dividend is a very investor-friendly 5.21%, which is $3.21/share.
That alone is enough to make Realty Income very popular with investors. However, that's not the only reason they love this stock. Unlike many other REITs or dividend stocks, which pay dividends every quarter, Realty Income pays them on a monthly basis. Additionally, this dividend aristocrat REIT has also achieved dividend king status by increasing its shareholder dividend for 50 consecutive years!
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