3 REITs Increasing Their Dividends: Innovative Industrial Properties (IIPR), Realty Income (O) and W.P. Carey (WPC)

Dividend growth stocks are like the golden geese that lay golden eggs. The golden geese are the world-class enterprises making big profits from providing the world with the products and/or services it demands.

And the golden eggs are the dividends that get paid to shareholders. But it’s even better than that. See, profits go up from selling more stuff, to more people, at higher prices. And the dividends also go up.

These golden geese are laying an ever-growing pile of golden eggs for you to live off of. And when you have a pile of golden eggs that is growing all by itself, almost like magic, why would you ever slaughter your golden geese by selling your stocks? You wouldn’t.

You’d just happily live off of that growing pile of golden eggs. Today, I’m going to tell you about three dividend growth stocks that just increased their dividends to shareholders.

These are golden geese laying more golden eggs. The three stocks are REITs that offer different yield and growth dynamics for different investors. We have lower yield and higher growth, mid-yield and mid-growth, and higher yield lower growth. Ready? Let’s dig in.

REIT Dividend Boost #1: Innovative Industrial Properties (IIPR)

Innovative Industrial Properties just increased their dividend by 6.1%.

A 6.1% dividend increase in and of itself is pretty strong. However, this increase is even stronger than it appears to be. That’s because this is the second dividend increase this year alone. And it follows up a 6.5% increase last quarter. So we’re talking about almost 13% dividend growth already in 2021 – and we’re only halfway through the year.

This is the fifth consecutive year of dividend increases for the medical-use cannabis real estate company.

With the cannabis industry still in its infancy, there could be a lot more growth ahead for this unique REIT. Although it only yields 3%, which is somewhat low for a REIT, it more than makes up for that low-ish yield with the extremely high dividend growth rate. Plus, that yield easily beats the market.

This stock is up almost 100% over the last year.

After a blistering run, it doesn’t look cheap by any metric. But if you want to get in on the ground floor of an exciting new industry, this stock should absolutely be on your radar.

REIT Dividend Boost #2: Realty Income (O)

Realty Income just just boosted their dividend by 0.2%.

0.2%? Why even bring it up? It’s almost nothing. Well, it’s important to have context here. This is the 111th dividend increase announced by the company since they went public in 1994. Yeah, 111 dividend increases in less than 30 years. Realty Income tends to increase their dividend every single quarter like clockwork. And these dividend increases add up – the five-year dividend growth rate is 4.2%.

The triple-net lease retail real estate company has increased its dividend for 28 consecutive years.

Realty Income gives you the opportunity to immediately have access to thousands of commercial properties – and the rent they generate – without doing any of the hard work. It’s like becoming an instant landlord, but better in every way. Realty Income pays out a monthly dividend, which is analogous to collecting a monthly rent check. By the way, the stock yields a very attractive 4.2%, which is three times higher than what the broader market offers.

Surprisingly, this stock doesn’t look expensive.

It’s only up about 11% over the last year. So it’s been practically ignored. And a lot of basic valuation metrics are within a stone’s throw away from their recent historical averages. For example, the stock’s five-year average yield is 4.2%. That’s where it’s at right now. If you want a golden goose that consistently lays a big pile of growing golden eggs on a monthly basis, Realty Income could be for you.

REIT Dividend Boost #3: W.P. Carey (WPC)

W.P. Carey increased their dividend by 0.2%.

What? Another small dividend increase? What gives? Well, I’ll tell you what. W.P. Carey, like Realty Income, tends to increase their dividend on a quarterly basis. Whereas most of the dividend growth stocks you’ll find out there announce dividend increases once per year, this REIT is typically giving out pay raises every few months.

This is the 24th consecutive year of dividend increases for the global real estate investment company.

Now, W.P. Carey doesn’t have the high dividend growth rate that Innovative Industrial Properties has. Nor does it offer the mid-single-digit dividend growth rate that Realty Income features. Instead, W.P. Carey’s five-year dividend growth rate is in the low single digits, at a bit under 2%. However, and this is a big however, the stock yields a market-crushing 5.5%. So you have to decide whether or not that fat dividend is worth it. If you’re looking for current income, it very well could be.

Another thing that makes W.P. Carey attractive, besides the super high yield? A low valuation.

The stock’s P/CF ratio is 16.7. That’s basically right in line with its own five-year average. Realty Income’s P/CF ratio is over 21. And Innovative Industrial Properties has a P/CF ratio of over 31. So if you want a high-yield REIT with an undemanding valuation, and if you’re willing to accept a lower growth rate, W.P. Carey still looks ripe for the picking.

— Jason Fieber

P.S. If you’d like access to my entire six-figure dividend growth stock portfolio, as well as stock trades I make with my own money, I’ve made all of that available exclusively through Patreon.