Dividend stocks are proven wealth creators. Over the last 50 years, they have outperformed non-payers by more than 2 to 1. A big driver is their steady (and often growing) income stream, which provides investors with a solid base return year in and year out.
One Liberty Properties (NYSE: OLP), Truist Financial (NYSE: TFC), and Mid-America Apartment Communities (NYSE: MAA) have magnificent records of paying dividends. That’s one of the factors that make them stand out to a few Fool.com contributors. Here’s why they believe investors won’t regret buying these top-notch dividend stocks right now.
The founding family wants to keep this REIT’s dividend going for years
Tyler Crowe (One Liberty Properties): There are many shorthand ways investors assess the viability of a dividend for years into the future. One of the more underappreciated ones is when founding families have large company ownership. When a family’s income comes from a single stock’s dividend payments, you can be reasonably sure that the company will be managed to preserve those dividend payouts.
That has been the case with One Liberty Properties for many years. The Gould family founded the real estate investment trust (REIT) and still owns 27.4% of the outstanding shares. Their large stake in the REIT has likely been why the company has paid consecutive dividends for over 30 years.
A long dividend history is a little impressive, but what emphasizes the company’s commitment to its dividend is that management has maintained its payout even though it has undergone a complete portfolio transformation. Over the past decade, the company went from a diversified REIT with a smorgasbord of properties (fitness centers, furniture stores, offices, and restaurants) to a mostly industrial warehouses and distribution facilities portfolio. In 2016, industrial made up about 22% of annualized rent. Today, industrial properties make up 67%.
This portfolio transformation was challenging. Funds from operations stagnated, and it had to take on more debt than most investors would be comfortable with. Despite these headwinds,…
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