Invest in Three Exceptionally Profitable Dividend Shares, Suitable for Long-Term Holding for a Decade
Investing in high-yield dividend stocks like W. P. Carey (WPC 0.74%), NNN REIT (NNN 5.73%), and VICI Properties (VICI 0.17%) can yield impressive passive income streams. However, dividend sustainability becomes a concern for high-yielding stocks. Fortunately, these three companies seem well-positioned to maintain their payouts in the years to come.
W. P. Carey, renowned for its 25-year dividend increase streak until late 2023, underwent a strategic move. Exiting the troubled office sector led to a dividend reduction and a new dividend payout ratio of 70%-75%. Despite this, it offers a high-yield dividend (over 6%) on a stable foundation. With a high-quality portfolio of operationally critical properties like warehouses, industrial facilities, and retail spaces secured by long-term net leases, W. P. Carey's steady cash flow and rental escalation clauses make its dividend sustainable.
NNN REIT, a retail-focused REIT, achieved an impressive milestone: delivering its 35th consecutive annual dividend increase. Its 5.7%-yielding dividend rests on a foundation of stable cash flow from its single-tenant net lease retail properties, featuring a weighted-average remaining term of 10 years. NNN REIT's financial flexibility, which allows it to acquire more income-producing retail properties, will contribute to its dividend growth.
VICI Properties, with a history of raising its dividend each year since its inception, offers a nearly 5.7%-yielding dividend. Its focus on owning experiential real estate secured by long-term net leases (up to 41 years) and increasing inflation protections ensures a steady and growing rental income. VICI Properties' strong financial profile enables it to invest in additional income-generating properties, maintaining its stable income streams.
Despite challenges like W.P. Carey's high dividend payout ratio and recent cuts, VICI Properties has a more sustainable dividend profile thanks to its healthy payout ratio and strong credit rating. NNN REIT's durability stemming from property income and diversification would make it a strong choice, assuming its financials align similarly.
These three companies' high-quality properties secured by long-term net leases and strong financial profiles enable them to continue expanding their portfolios of income-generating properties. This should maintain their ability to pay stable and growing dividends in the long term, making them attractive options for income seekers.
W. P. Carey's strategic exit from the troubled office sector resulted in a dividend reduction, but its high-yield dividend of over 6% is still sustainable due to its high-quality portfolio and steady cash flow. Investors looking into financing opportunities might find NNN REIT's 35-consecutive annual dividend increases attractive, especially since its foundation rests on stable cash flow from its retail properties.
