Dividend-Growing REITs: Premium Stocks for Long-Term Income Investors

Why Dividend Stocks to Invest In Matter

Dividend stocks to invest in have consistently outperformed their non-dividend-paying counterparts, delivering superior returns across decades. According to Ned Davis Research and Hartford Funds data, dividend payers within the S&P 500 have surpassed non-payers by more than two-to-one margin over the past 50 years. The strongest wealth creation, however, has come from companies with disciplined track records of systematically raising their payouts.

The real estate investment trust (REIT) sector stands out as particularly attractive for income-focused portfolios. REITs operate under a unique structure that requires them to distribute at least 90% of taxable income to shareholders, creating a natural mechanism for dividend expansion as properties appreciate and rental income rises. Three standout dividend stocks to invest in within this sector offer compelling long-term holding opportunities.

Realty Income: The Consistent Dividend Raiser

Realty Income (NYSE: O) ranks as the world’s sixth-largest REIT, operating over 15,000 properties spanning retail, industrial, gaming, and other asset classes across the U.S. and Europe. The company’s differentiation lies in its net lease structure, where tenants assume responsibility for property operating costs including maintenance, taxes, and insurance. This arrangement creates exceptionally stable cash flows.

Realty Income’s dividend growth record is extraordinary. The company has increased its distribution for 112 consecutive quarters—spanning nearly three decades. This translates to a compound annual dividend growth rate of 4.2% over 30 years. The current dividend yield stands at 5.7%.

The REIT’s expansion strategy remains straightforward yet effective: systematically acquire net-leased properties and reinvest growing cash flows into the portfolio. With an estimated $14 trillion total addressable market for global net lease real estate, Realty Income possesses substantial runway for continued acquisition activity. The company maintains one of the sector’s strongest balance sheets, providing financial flexibility for ongoing growth. Investors have benefited from a robust 13.7% compound annual total return, demonstrating how dividend growth compounds into exceptional long-term wealth creation.

Extra Space Storage: Aggressive Dividend Growth

Extra Space Storage (NYSE: EXR) dominates the self-storage sector, commanding approximately 15.3% of the entire U.S. market through its ownership or management of nearly 4,200 properties encompassing over 322 million square feet of rentable space.

The company operates a diversified revenue model: it owns 48% of its portfolio outright (generating steadily climbing rental income), maintains joint venture interests in 11% of properties, and manages the remaining 41% (producing consistent management fees). This structure creates multiple income streams supporting dividend increases.

Extra Space Storage has aggressively expanded capacity through new acquisitions, joint venture partnerships, and third-party management platform growth. The 2023 acquisition of Life Storage for $15 billion exemplified this expansion strategy. Over the past decade, the company has boosted its dividend payout by more than 110%, currently offering a yield exceeding 6%.

The REIT’s growth prospects remain compelling. Its bridge lending platform finances self-storage developers, creating future acquisition opportunities as financed properties complete development. Additionally, the company systematically acquires properties from underperforming joint venture partners and former managed properties when original owners exit. This multi-pronged growth strategy, combined with a strong balance sheet, positions Extra Space Storage to continue elevating dividends. The stock has delivered over 2,400% in total returns across the past 20 years—ranking as the sector’s third-best performer.

Rexford Industrial Realty: Southern California Specialist

Rexford Industrial Realty (NYSE: REXR) operates as a specialized industrial REIT with exclusive focus on Southern California’s 420-property portfolio comprising 51 million square feet. This geographic concentration, rather than representing a limitation, reflects the region’s status as one of the world’s most critical industrial real estate markets.

Southern California’s industrial sector benefits from structural advantages: robust demand from manufacturing, logistics, and e-commerce operations combined with constrained supply from geographic limitations and existing development saturation. These dynamics maintain elevated occupancy rates and drive consistent rent expansion.

The company’s leasing activity reflects this market strength. Recent lease signings in the current period have averaged 23.9% above expiring rates, with embedded annual rental growth of 3.6%—significantly exceeding inflation. This pricing power translates directly into growing net operating income.

Rexford pursues organic portfolio growth through redevelopment initiatives and strategic acquisitions targeting underutilized or development-stage properties. These expansion activities have driven dividend growth at an impressive 15% compound annual rate over the past five years. The current dividend yield reaches 4.2%. Management maintains a fortress balance sheet, enabling continued portfolio expansion and supporting future dividend increases as market fundamentals remain resilient.

The REIT Advantage for Dividend Investors

REITs represent premier vehicles for building long-term dividend income streams. Structures like Extra Space Storage, Realty Income, and Rexford Industrial Realty demonstrate that consistent dividend elevation is achievable through disciplined capital deployment and market-responsive acquisition strategies. For investors seeking dividend stocks to invest in for multi-decade holding periods, these REITs offer combination of current income and capital appreciation potential driven by methodical dividend growth trajectories.