In 2005, the S&P 500 Dividend Aristocrats Index was launched. Since then, it has become a good place to go when considering investments with long records of growth and income even through economic ups and downs.
The list comprises S&P 500 companies that have increased dividends every year for at least 25 straight years, command a market cap of at least $3 billion, and demonstrate liquidity in a trading volume of at least $5 million a day for three months.
Dividends are not just window dressing. According to S&P Dow Jones Indices, those payouts account for nearly a third of total equity return (with the other two-thirds from capital gains, of course). That's why dividend-paying stocks can do better than their go-go counterparts in turbulent markets.
And you can buy equities that track them; for example, the ProShares S&P 500 Dividend Aristocrats ETF or the S&P Dividend Aristocrats Target 25 Portfolio. Here's the whole list, which includes such well-known names as AT&T, Coca-Cola, IBM, and Procter & Gamble, as well as three real estate investment trusts (REITs): Essex Property Trust (NYSE: ESS), Federal Realty Investment Trust (NYSE: FRT), and Realty Income (NYSE: O).
Let's take a quick look at these Dividend Aristocrats.
Essex Property Trust
Based in San Mateo, California, Essex Property Trust is a buyer, builder, redeveloper, and manager of multifamily residential properties in select West Coast markets.
In 1994, this residential REIT went public with 16 multifamily communities. Now, the company boasts not only a portfolio of 246 communities with about 60,000 apartments but also three more properties under active development.
Essex Property Trust has been growing its payout ever since, with a current dividend yield of 2.65% based on a trailing-12-month (TTM) dividend payout of $8.36 per share. Pricier than your average REIT, Essex has a market cap of $20.6 billion based on its Friday, Aug. 13 closing price of $316.95 a share. That's 5.88% off the 52-week high of $336.75 the company reached on July 30 and sharply above its 52-week low of $186.30 hit last Oct. 28.
Federal Realty Investment Trust
Federal Realty Investment Trust focuses on developing, owning, and operating retail and mixed-use properties in what it considers the nation's most desirable markets, primarily major coastal settings such as Boston, Washington, D.C., San Francisco, and Los Angeles.
The Maryland-based company now has a portfolio of 105 properties with about 3,000 mixed-use tenants and 2,900 residential units. Federal Realty also can boast of increasing its quarterly dividends for 54 straight years -- what it calls the longest record in the REIT industry.
Federal Realty is currently yielding 3.56% on an annual dividend payout of $4.28 per share. The company's market cap was $9.3 billion, also based on its Friday, Aug. 13 closing price of $120.00 a share. That's 4.00% below its 52-week high of $125.00 from June 14 and sharply recovered from its 52-week low of $67.01 from last Oct. 29.
Realty Income calls itself "The Monthly Dividend Company" and has been doing just that for 612 straight months (that's 51 years for anyone keeping score). Meanwhile, it raised its dividend for 95 straight quarters.
The San Diego-based operation now has more than 6,700 properties under long-term net lease agreements with about 630 clients in 58 retail and other industries across all 50 states, Puerto Rico, and the U.K.
Realty Income is currently yielding 3.98% on an annual dividend payout of $2.83 per share. The company's market cap was $28.0 billion, also based on its Friday, Aug. 13 closing price of $71.95 a share -- a few pennies off its 52-week high of $71.98 reached earlier in the day and well above its 52-week low of $57.00 reached on Jan. 12.
The Millionacres bottom line
Each of these stocks can stake a claim to being royalty not only among REITs but also the greater world of real estate stocks and publicly traded equities in general. They pretty much fit the description of an ideal buy-and-hold for conservative investors interested in growth, income, and perhaps less of a roller-coaster ride than many others when the market goes nuts.