11 High-Dividend REITs to Buy in 2023

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Contributor, Benzinga
July 23, 2023

Real estate has historically rewarded long-term investors, giving them stable cash flow, appreciation and tax breaks. These assets are normally difficult to access because of high down payments, but real estate investment trusts (REITs) have helped level the playing field. REITs invest in many properties based on specified criteria and must distribute 90% of their taxable income to investors. That means high dividends while waiting for your shares to appreciate. Some high-dividend REITs offer respectable appreciation and above-average dividend yields.

What Are High-Dividend REITs?

High-dividend REITs are real estate firms that acquire properties and distribute most of their income to investors. Many of these REITs trade on the stock market and can give investors stable cash flow and good returns. Publicly traded REITs are also extremely liquid, just like any other group of stocks. This liquidity and the low barrier to entry give REITs distinct advantages over buying real estate.

What Makes High-Dividend REITs so Profitable?

High-dividend REITs are profitable and can scale operations because many of them work with top corporations and have long-term tenant leases. This stability in good times and bad times helps these REITs receive consistent income and pass it on to investors. 

Best High-Dividend REITs in 2023

A high-dividend yield doesn’t tell the entire story. Investors should look for REITs with sustainable business models and a commitment to raising the dividend. These are some of the best high-dividend REITs in 2023.

Note to writer: Please List out the stock/etf options with the name and the ticker symbol (Eg: SPDR Gold Shared (NYSEMKT: GLD)

1. Public Storage (NYSE: PSA)

Public Storage currently has a 4% dividend yield that comfortably exceeds most of the yields you will find in the S&P 500. PSA shares have also gone up by 30% over the past five years. The REIT is the largest holder of self-storage space, which helps it serve businesses and consumers. 

2. Digital Realty Trust Inc. (NYSE: DLR)

Digital Realty Trust primarily invests in data centers and has top clients like Meta, Oracle, JPMorgan, Verizon and IBM. The REIT services 5,000 global customers through over 300 data centers that are spread across six continents. DLR is the eighth-largest publicly traded REIT and has achieved 18 consecutive years of revenue growth. The stock currently has a 4.10% yield and is up by 15% year-to-date.

3. Arbor Realty Trust Inc. (NYSE: ABR)

Arbor Realty Trust has a 10% dividend yield and a profit margin that has ranged from 45% to 55% in the past few quarters. The mortgage REIT has delivered a 49% gain over the past five years that does not include the dividend. The company has consistently raised the dividend and sometimes raises the dividend multiple times per year. The company’s quarterly dividend payment went from $0.21 per share in 2018 to $0.42 per share in 2023. Unlike most mortgage REITs, Arbor Realty Trust did not pause or cut its dividend during the pandemic.

4. National Storage Affiliates Trust (NYSE: NSA)

National Storage Affiliates Trust has a 6.40% dividend yield and specializes in self-storage properties. The company holds 1,117 properties for a combined 72.8 million rentable square feet. Shares have dropped by roughly 50% from the all-time high but are up by 16% over the past five years. Investors who see this as a buy-the-dip opportunity can capitalize on an economic recovery while securing a high dividend yield. 

5. Medical Properties Trust Inc. (NYSE: MPW)

Medical Properties Trust has raised its dividend by 71% since its initial public offering (IPO) in 2005. The yield is 11%, but share returns have not been attractive. The company’s stock price is down by 26% over the past five years. The trust has 444 medical properties and approximately 45,000 licensed beds in 10 countries. The company recently declared a quarterly dividend of $0.29 per share, which is well within the company’s $0.37 funds from operations (FFO) per share.

6. Main Street Capital Corp. (NYSE: MAIN)

Main Street Capital is a principal investment firm that pays a monthly dividend. The stock’s annualized dividend yield is 6.70%. Revenue and earnings growth have accelerated in recent quarters. Main Street Capital has over $6.6 billion in capital under management. The company gives long-term debt and equity capital to lower-middle-market companies and seeks to partner with entrepreneurs. The company aims to work with borrowers who generate $10 million to $150 million in annual revenue. 

7. Stag Industrial Inc. (NYSE: STAG)

Stag Industrial has over 11.6 million square feet of industrial properties and pays a monthly dividend. The yield currently sits at 4%, and the stock is up by 40% over the past five years. The company produces stable income for investors, and its stock price is roughly 20% removed from its all-time high.

8. MFA Financial Inc. (NYSE: MFA)

MFA Financial is a REIT that uses leverage to invest in residential mortgage assets. The stock is more than 60% below its pre-pandemic price. That drop has presented investors with a 12% dividend yield, and the firm is showing signs of a turnaround. In the first quarter, MFA Financial reported net income of $72.8 million. In the same quarter last year, MFA Financial reported a net loss of $82.9 million. The stock has a GAAP book value of $15.15 per share which is higher than the stock’s current market price, which hovers at around $11.50 per share.    

9. Getty Realty Corp. (NYSE: GTY)

Getty Realty shares offer a 5% dividend yield and have jumped by 22% over the past year. The company targets corner locations with high traffic for its clients. Getty Realty serves customers in the convenience and automotive retail sectors. The company has 1,047 properties spread across 39 states with a focus on high-density metropolitan areas. The trust has a 99.7% occupancy rate.

10. W.P. CareyInc. (NYSE: WPC) 

W.P. Carey ranks as one of the largest net lease REITs and recently celebrated its 50-year anniversary. The trust holds approximately $25 billion in high-quality commercial real estate and self-storage properties. The stock offers a 6% dividend yield and has had healthy revenue and earnings growth over the past several quarters.

11. NNN REIT Inc. (NNN)

NNN REIT focuses on net lease properties. The company enjoys profit margins that typically range from 40% to 45%, and those high profits have resulted in a 5% dividend yield. NNN has generated an 11.8% annualized return over the past 30 years. NNN has increased its dividend for 33 consecutive years and has 35 million square feet of high-quality properties. Most of those properties have tenants that signed long-term net leases.

Where to Invest in High-Dividend REITs

Once you feel confident in buying a few high-dividend REITs or other stocks, you have to choose the right broker. The broker you select can impact your fees and your overall experience. These are some of the top brokers for high-dividend REIT investors to consider.

Generate Steady Cash Flow from High-Dividend REITs

High-dividend REITs give investors the opportunity to generate high cash flow from a real estate portfolio. A team of professionals manages the properties and identifies investment opportunities. These investments are more passive than traditional real estate, and you can enter and exit at any time. Investors should assess their financial objectives before deciding if high-dividend REITs make sense for their portfolios.

Frequently Asked Questions

Q

Which REIT has the highest dividend?

A

Two Harbors Investment (TWO) currently has the highest dividend yield.

Q

Are high-yield REITs risky?

A

High-yield REITs can be risky, but some of these stocks produce reliable returns and cash flow. Investors should conduct due diligence before investing in any stock.

Q

Is a high-dividend REIT a good investment?

A

A high-dividend REIT can be a good investment. Investors should look at the business model and financial performance instead of only looking at the dividend.