There are aristocrats. And then there is royalty, or in our case here, kings. Aristocrats are folks of high rank and privilege. Or for our discussion, publicly traded equities that have distinguished themselves as high-ranking performers in one crucial measure: delivering dividends.
Dividends make up a significant chunk of the total payout for many stocks. They make those stocks attractive to people looking for income as well as growth, and they help moor those equities more firmly than they otherwise might be when economic winds buffet the markets.
Since 2005, there has been a list of Dividend Aristocrats. They're S&P 500 companies that for at least 25 consecutive years have boosted their payout every year, posted trading volume of at least $5 million a day for three months, and have a market cap of at least $5 billion.
Those criteria winnow the list of thousands of stocks down to 65. Because at Millionacres we're all into real estate investing, we recently focused on the three real estate investment trusts (REITs) that are on that list. Check that out here: "These REITs are Dividend Aristocrats."
It's Good to Be King (of the REITs)
Then there are kings. In this case, Dividend Kings. These are the Dividend Aristocrats that have raised their dividends not just for a quarter century but for a half-century. Only one REIT is among that group of 31 stocks that are Dividend Kings for 2021.
That would be Federal Realty Investment Trust (NYSE: FRT). When this urban mixed-use REIT announced its regular quarterly dividend of $1.07 per share -- a hike of one cent -- a few weeks ago, that marked the 54th consecutive year the Maryland-based commercial real estate specialist has raised its payout. That's the longest such streak in the REIT space.
Federal Realty now has 105 properties with approximately 3,000 CRE tenants and another approximately 2,900 residential units in properties located primarily in desirable neighborhoods in and around Washington, D.C., Boston, San Francisco, and Los Angeles.
"These unique and vibrant environments that combine shopping, dining, living, and working provide a destination experience valued by their respective communities," the company says. That's a formula that's apparently worked since its founding in 1962.
Meanwhile, Federal Realty stock closed at $116.06 a share on Aug. 20, 7.15% off its 52-week high of $125.00 reached on June 14 and 73.20% above its 52-week low of $67.01 from last Oct. 29. That's good for a yield of 3.69% based on an annual dividend of $4.28 and a market cap of about $9 billion.
The Millionacres bottom line
Any of the Dividend Kings make good candidates for stocks to buy and just hold on to for the long run.
But only one has to pay dividends, because it's a REIT, and that's what they were created to do in return for tax advantages.
Federal Realty may not make you a millionaire overnight; it most likely won't break you quickly either. It's a slow and steady performer with a long record of solid performance that merits consideration as a real estate stock in any portfolio.