Electronic income

These 3 Stocks Are Passive Income Warriors

You work hard for your money. For this reason, your hard-earned money should work hard for you. One way to make money from your money is to invest it in stocks that pay a dividend, allowing you to earn passive income from your investment.

REITs (REITs) are perfect for making passive income as they must pay dividends to comply with IRS regulations. However, some REITs stand out for their ability to grow their dividend payout each year. Essex Land Trust (ESS 1.74%), Domestic commercial properties (NNN 1.08%)and WP Carey (WPC 0.92%) have all generated dividend growth for more than two decades. Here’s a look at these passive income warriors.

An elite REIT

Essex Properties Trust is a Residential REIT focused on owning apartment communities along the west coast. The company has increased its dividend in each of the past 28 years, qualifying the S&P500 member as Dividend Aristocrat. Essex is one of only three REITs in this elite group. Essex also offers an attractive dividend yield of 3.3%, more than double the 1.6% return of the S&P 500.

The company’s focus on the West Coast has been one of the keys to its success. Essex has benefited from steady demand for apartments in larger West Coast cities, where it is often cheaper to rent than to buy a house. This has helped keep occupancy levels high, allowing the REIT to steadily increase rental rates. It has also enabled the REIT to expand its portfolio by developing new apartment communities.

Essex Properties should be able to continue to provide its investors with a steadily growing stream of passive income. Demand for apartments remains strong as building new apartment communities is difficult, limiting new supply. As a result, rents should continue to rise. In addition to this, Essex has a strong balance sheet, which gives it the financial flexibility to continue to grow its apartment portfolio by making acquisitions and developing new communities.

Focused on retailers in need of real estate

National Retail Properties is a Retail REITs focused on the possession of independent buildings in triple net rental (NNN) to retailers who need physical space to generate sales. It focuses on retailers not susceptible to the threat of e-commerce, such as restaurants, convenience stores, auto services and equipment rental stores. This strategy has enabled the REIT to generate stable rental income, providing it with a solid base for its 4.8% dividend.

National Retail Properties stands out for its ability to constantly increase its dividend. The REIT had its 32nd straight year of increasing its dividend in 2022. While that’s long enough to be considered a dividend aristocrat, it doesn’t make the list because it’s not a member of the S&P 500.

The company should be able to continue to increase its dividend in the future. The REIT has a conservative dividend payout ratio and balance sheet. This gives him the financial flexibility to purchase more income-generating commercial properties. He usually buys properties from the operator in sale-leaseback transactions. This gives retailers the capital they need to continue expanding while providing National Retail Properties with more income-generating real estate.

A rock-solid REIT

WP Carey is a Diversified REITs which owns NNN operationally critical real estate leased to sole tenants. It owns industrial, warehouse, office, retail, self-storage and other properties in the United States and Europe. This diversification has allowed WP Carey to receive regular rental income.

This stable rental income provides a solid base for WP Carey’s dividend. The REIT has increased its payout every year since its IPO in 1998. Dividend growth has been the steady rise in rental rates and its ability to expand its portfolio by acquiring income-producing real estate.

WP Carey should be able to continue to grow its dividend. The REIT has a strong dividend payout ratio and balance sheet, which gives it the financial flexibility to continue closing deals. Add to that the continued growth in rental rates on existing properties, and the REIT should have the growing cash flow needed to continue to increase its yield by 4.9%.

Excellent REITs for generating passive income

Essex Property, National Retail Properties and WP Carey have generated decades of steadily rising dividends. Given their strong financial profiles and sustainable portfolios, these REITs should continue to provide more passive income to their investors in the coming years. This sets them apart as great stocks for those looking for passive income.