Investing in dividend stocks can be a great way to set up a durable income stream. The best ones can provide you with stable and growing recurring dividend income that can last a lifetime.
Realty Income (O 3.06%) and Mid-America Apartment Communities (MAA 3.52%) have been very durable dividend stocks over the decades. The real estate investment trusts (REITs) currently pay higher-yielding dividends that are on rock-solid financial foundations. They’re great dividend stocks for those with a few hundred dollars to buy and hold for the very long term.
A very steady dividend grower
Realty Income has been a model dividend stock over the decades. The REIT has paid 655 consecutive monthly dividends since its founding in 1969. It has increased its dividend payment every year since its public market listing in 1994, including the past 109 quarters in a row. It has raised its dividend payment 128 times overall since it came public, growing it at a 4.2% compound annual rate.
The REIT’s monthly dividend payment is currently $0.264 per share, amounting to $3.168 annually. With its share price recently below $55, it has a 5.8% dividend yield.
Realty Income’s high-yielding dividend is on an extremely firm foundation. The REIT owns a diversified real estate portfolio , including retail, industrial, gaming, and other properties, net leased to many of the world’s leading companies. Net leases provide very stable rental income because the tenant covers all operating costs, including routine maintenance, building insurance, and real estate taxes.
The REIT pays out a conservative percentage of its stable income in dividends — about 75% of its adjusted funds from operations, or FFO. That gives it a big cushion while allowing it to retain meaningful excess cash to fund new investments. Realty Income also has one of the strongest balance sheets in the REIT sector. It’s one of only eight with two bond ratings of A3/A- or higher.
Realty Income has grown its adjusted FFO per share at a mid-single-digit rate over the past three decades. It should be able to maintain that pace in the future. It has lots of financial flexibility to continue completing accretive acquisitions. Meanwhile, it has a massive growth runway, with the estimated global net lease addressable market sitting at roughly $14 trillion. That should enable Realty Income to continue to steadily increase its high-yielding dividend in the decades to come.
A pillar of dividend dependability
Mid-America Apartment Communities, or MAA, has been a very stable dividend stock since it came public in 1994. The residential REIT has never suspended or reduced its dividend payment during its three decades as a public company. While the REIT hasn’t increased its payment every year, it has a solid record of growth, including raising its payout for the last 15 years in a row.
The apartment landlord last raised its dividend payment by 3.1% in December to $1.515 per share each quarter, or $6.06 annualized. That gives it more than a 4% dividend yield at its recent share price of less than $150.
That higher-yielding payout is also on a rock-solid foundation. MAA generates very stable rental income because of the growing demand for housing across the Sun Belt region, its focus area. That keeps occupancy high while driving steady rental growth. The REIT also has a conservative dividend payout ratio, about 66% of its core FFO, and an elite balance sheet, with A3/A- bond ratings.
MAA uses its strong financial profile to grow its apartment portfolio. It’s investing about $1 billion to build new apartment communities across the Sunbelt region that should stabilize through early 2028. The REIT expects to start three to four new projects this year and has a growing pipeline of future development sites. As opportunities arise, it will also acquire stabilized and recently completed apartment communities. For example, it made around $400 million in acquisitions last year, an investment level it aims to repeat in 2025. MAA will also invest money to upgrade existing communities and units to make them more attractive to renters, enabling it to charge higher rental rates.
The company’s growth drivers, which should remain durable in the decades ahead, should enable MAA to continue increasing its dividend over the long term.
High-quality, high-yielding dividend stocks
Realty Income and MAA have proved to be very durable dividend stocks over the decades. These well-built REITs are in excellent positions to continue increasing their high-yielding dividends in the future. That makes them great dividend stocks to buy for those with a few hundred dollars available to invest. They could turn that investment into a growing stream of dividend income that could last a lifetime.
Matt DiLallo has positions in Mid-America Apartment Communities and Realty Income. The Motley Fool has positions in and recommends Mid-America Apartment Communities and Realty Income. The Motley Fool has a disclosure policy.