A healthy lifestyle for many people means living longer and spending more time in retirement. While Social Security can provide some support, it's essential to use investments to generate income during the post-work years. Dividend-paying stocks are a natural choice, offering the potential benefits of regular income and long-term capital appreciation to offset inflation. One option to consider is real estate investment trusts (REITs), which own income-producing assets and are required to distribute at least 90% of their earnings as dividends to shareholders.
Digital Realty
Digital Realty is a leading provider of infrastructure to the digital world, operating approximately 300 data storage centers worldwide. With a client list that includes Amazon, Microsoft, Oracle, and Alphabet's Google, Digital Realty plays a vital role in the technological ecosystem. Although the stock has experienced a decline of about 38% this year, it continues to expand its operations and income as a turnkey solution for companies, governments, and organizations in need of cloud services. Analysts have set a consensus price target of $160.71 for Digital Realty, which currently trades at around $108 per share and offers a dividend yield of approximately 4.5%.
DLR Dividend Yield Chart
Gladstone Commercial
Gladstone Commercial may be smaller than other REITs, but it offers a significantly higher yield. This company owns 136 industrial and office properties across 27 states and has been a consistent dividend payer since it went public in 2003. With a focus on attracting retirees and income investors, Gladstone Commercial actively manages its portfolio to prioritize income generation. By shifting its assets towards industrial buildings, including manufacturers and logistics sites, it aims to provide a promising investment opportunity. Investors can currently enjoy a yield of over 8% from a company that has never missed or reduced a monthly dividend payment throughout its nearly 20-year history.
Realty Income
If you prefer monthly dividends, Realty Income, known as the "Monthly Dividend Company," might be the perfect fit. This retail REIT has been paying shareholders 12 times a year for more than 50 years, without fail. Furthermore, it has raised its dividend payout at least once annually for over a quarter-century, making it one of the Dividend Aristocrats. Realty Income generates reliable cash flow from a diversified portfolio of more than 11,000 properties. Its emphasis on single-tenant retailers signed to long-term net leases ensures consistent income, as the tenants are responsible for taxes, insurance, and maintenance. With essential retailers like Walgreens, 7-Eleven, and Dollar General among its tenants, Realty Income offers stability and potential growth. Currently yielding 4.7% and trading at approximately $63 per share, analysts project a consensus target price of $76.57, indicating significant potential for both retirees and those planning for retirement.
In conclusion, for investors looking to secure a steady income stream during retirement, real estate dividend stocks provide an attractive opportunity. Digital Realty, Gladstone Commercial, and Realty Income are three compelling options to consider, offering a combination of income and the potential for long-term capital appreciation. Make sure to conduct thorough research and consider your personal financial goals before making any investment decisions.
Disclaimer: This article is for informational purposes only and should not be construed as financial or investment advice. Always consult with a qualified professional before making any investment decisions.
