If you are watching the market volatility and worried about the future, you might want to shift the way you look at things. An easy win is to add some dividend-paying stocks to your portfolio so you can pay attention to dividend checks instead of the ups and downs of the S&P 500 index. Three great starting points are Vici Properties (NYSE: VICI), Realty Income (NYSE: O), and Dividend King Federal Realty (NYSE: FRT).
Vici Properties came public in 2018, so it is a rather young real estate investment trust (REIT). That said, it has increased its dividend each year since its IPO. The really interesting thing about this landlord, however, is what it owns. It is focused almost entirely on owning Casino properties.
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Casinos are gigantic structures that house gaming, hotels, restaurants, shopping, and event spaces. Although the company’s tenants operate everything, they need the space if they want to remain in business. This is why, even during the coronavirus pandemic, when casinos were largely shut down, they continued to pay their rent.
That’s highly likely to be the normal outcome in the next market and/or economic downturn because casinos are highly regulated assets, and an operator wouldn’t easily give up access to such an important part of its business. Add in a well-above-market 5.4% yield, and you can see why an investor might like to own Vici Properties.
Next up is Realty Income, one of the largest net lease REITs on Earth. It has increased its dividend annually for 30 consecutive years. That includes hikes through the dot-com crash, the Great Recession, and the coronavirus pandemic. However, the really interesting one is the Great Recession because occupancy never fell below 96% despite the fact that Realty Income is heavily focused on retail assets (around 75% of rents). This is a highly reliable dividend stock.
There are a few key facts to know about its business. For starters, it has a huge portfolio with over 15,600 properties. Second, it is geographically diversified, with assets in North America and Europe. And third, it is financially strong thanks to an investment-grade-rated balance sheet. Put it all together, and this giant net lease REIT has advantaged access to capital, multiple levers for growth, and the size to make deals (including buying entire companies) that its peers couldn’t manage. All of that, plus a 5.6% yield, should make Realty Income very popular with dividend investors.
