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Motley Fool Issues Rare “All In” Buy Alert

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A growing number of investors are seeking the safety and consistency of dividend stocks in light of recent market volatility. After all, these types of equities have long proven their ability to provide passive income, but some dividend stocks outshine others when it comes to reliability.

Real estate investment trusts (REITs) Realty Income (O -1.10% ) , Federal Realty Investment Trust (FRT -0.04% ) , and W.P. Carey (WPC -0.91% ) are three real estate stocks that are passive income all-stars, with long track records of above-average dividend yields. 

WPC Dividend Yield data by YCharts.

Realty Income is a Dividend Aristocrat that's raised its dividend 27 years in a row. Aside from its stellar track record, Realty Income is also one of the largest net lease real estate investment trusts (REITs) in the world, owning and leasing roughly 11,400 properties in Europe and the United States.

Its tenant base, which is primarily made up of retail operators, includes investment-grade tenants like Walmart, FedEx, and BJ's. The REIT is aggressively expanding, having spent just over $3 billion so far this year and over $8 billion from 2020 to 2021. This rapid expansion has helped boost its revenue and continues to drive its dividend growth.

Over the last year, the company raised its dividend four times, equaling around a 4.8% increase. Its latest raise brings its yield to 4.3% today, with shares trading around $67 at the time of this writing.

What's better than 27 years of dividend payments? Fifty years of dividend payments.

Federal Realty Investment Trust is the only REIT to also hold the title of Dividend King, having raised its dividend for 55 consecutive years. This retail REIT specializes in the ownership and leasing of 104 high-end outdoor shopping centers in suburban neighborhoods of nine major metro markets.

The pandemic was hard on Federal Realty Investment Trust, but the company is seeing strong improvements. Leasing activity is up, occupancy is rising, and funds from operations (FFO), a key metric for a REIT's profitability, is growing notably year over year.

A recession could hinder its rate of recovery, but the company is in a strong financial position to withstand any short-term headwinds. Its debt-to-EBITDA (earnings before interest, taxes, depreciation, and amortization) ratio of 4.3 is below the REIT industry average of five, and it has $176 million of cash and cash equivalents. Couple that with its healthy dividend payout ratio of 67%, and it's clear the company's got plenty of room to grow. 

Recent stock market volatility and concern over the impact of a recession on retail spending have pushed the company's share price down 18% at the time of this writing. Its lower share price plays to investors' advantage, bumping its dividend yield to just under 4.3%. 

W.P. Carey may not have a fancy title for the number of consecutive dividend increases it's made, but don't let that fool you. The diversified net lease REIT has an excellent track record, having maintained 24 years of dividend raises.

Unlike its fellow passive-income all-star peers, W.P. Carey doesn't focus exclusively on owning or leasing any one type of real estate. It owns a diverse mix of over 1,300 properties, including self-storage facilities, industrial and warehouse buildings, office space, and multi-family housing.

This diversification has faired well for the company over the years, helping it maintain slow but reliable growth for the company and its shareholders. It also helped keep its payout ratios within a normal range, despite the steady increases.

The stock has caught the attention of investors as of late, pushing its stock price up 5% over the last year. But don't let the elevated price scare you. Its dividend yield of just over 5% is one of the best in the REIT industry, given the company's reliability.

Liz Brumer-Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends FedEx and Walmart Inc. The Motley Fool has a disclosure policy.

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