Many stocks pay a dividend. However, some stand out for their ability to consistently increase that payout over time. That makes them ideal for those seeking to collect passive income. 

Three stocks that have been passive income machines over the years are Digital Realty Trust (DLR 2.58%), Agree Realty (ADC 2.93%), and Realty Income (O 0.25%). Here's a look at why income-focused investors will want to consider adding at least one of these real estate investment trusts (REITs) to their portfolio. 

This dividend machine is on sale

Matt DiLallo (Digital Realty): Digital Realty has been an exceptional dividend stock over the years. The data center REIT has increased its dividend payment every year since its initial public offering (IPO), pushing its current streak to 17 straight years. The company has grown its payout at a 9.8% compound annual rate during that time frame. 

That upward trend in the payout should continue. Demand for data centers remains strong. Digital Realty reported record bookings in the first quarter. Meanwhile, rental rates on renewal leases rose 6.1% in the first quarter. 

Continuously growing demand for data center solutions is leading Digital Realty to keep investing in expanding its portfolio. The company's development pipeline reached an all-time high of 44 projects across 28 metro areas worldwide in the first quarter. The company has already pre-sold 58% of that capacity. Because of that, it acquired land in three markets during the quarter and three more after the period ended to keep expanding. In addition to its organic growth, Digital Realty also purchased a majority stake in Teraco, a leading African data center provider. The company maintains a solid financial profile, giving it the flexibility to continue expanding while growing the dividend. 

Despite its strong growth prospects, shares of Digital Realty have tumbled more than 25% this year. However, one benefit of that sell-off is its dividend yield has risen to 3.8%. That makes it even more attractive for those seeking to collect passive income. 

Not beaten down but still a good buy

Marc Rapport (Agree Realty): Agree Realty has beaten the odds this year. This retail REIT's share price is up about 2.5%, while the total return when adding in the dividend is 4.6%. That's impressive in a year when the S&P 500 is down nearly 20%.

That's no aberration. Agree Realty has posted a compound average annual return of 12.5% since its IPO in 1994. Meanwhile, in the past 10 years it has grown a hypothetical $10,000 investment into $51,220, compared with about $34,520 for the S&P 500.

The dividend is nice, too. Agree has raised its dividend by an average of 5.5% a year for the past 10 years, including four small boosts just since changing from quarterly to monthly payouts in January 2021. That puts the yield at about 3.9%, healthy but a bit below its historical average since the market began sharply pushing up the stock price in the past couple of years.

What's paying for all this passive income is active management of a growing portfolio that has now reached 1,510 properties in 47 states. Investment-grade, recession-resistant tenants dominate the tenant list, led, in order of base rent, by Walmart, Tractor Supply, and Dollar General.

The company's properties are more than 99% leased. Meanwhile, after plunking down about $430 million in 124 more net-lease investments in the first quarter alone, ADC raised its annual acquisition guidance for 2022 to $1.6 billion.

An expanding portfolio and a penchant for payouts should keep Agree Realty an agreeable option for income investors for some time to come.

Realty Income is a Dividend Aristocrat that has raised its dividend through thick and thin

Brent Nyitray, CFA (Realty Income): Realty Income stock should be a core holding for an income investor's portfolio. It is a Dividend Aristocrat, which means that it has a long history of annual dividend increases. Realty Income has been around since the late 1960s, so it has been through a number of tough economic environments including the 1970s inflation, the Great Recession, and the COVID-19 pandemic.

It has a highly stable business model, which makes it suitable for a retiree's portfolio. Realty Income invests in single-tenant properties that are then leased out to largely investment-grade tenants under long-term triple-net leases. These leases require the tenant to take care of taxes, insurance, and maintenance. 

Triple-net leases generally have longer terms (seven to 10 years) and contain automatic rent increases. These contracts represent a big financial commitment for both parties. The type of tenant that appeals to a triple-net-lease operator like Realty Income would be a drug store, dollar store, or convenience store. These companies are often referred to as defensive stocks since they are less economically sensitive. Regardless of the state of the economy, people will still buy toothpaste, paper plates, and snacks. This defensive characteristic is what separates companies like Realty Income from mall REITs. In a recession, people will spend less on designer clothes and other discretionary items. 

Realty Income goes by the moniker "The Monthly Dividend Company" and indeed it pays a monthly dividend. While most REITs were forced to cut their dividends during the COVID-19 pandemic, Realty Income raised its dividend three times in 2020. The company recently increased its monthly dividend from $0.247 to $0.248. At current levels, the stock has a dividend yield of 4.3%.