This year is turning into an income lover's dream. With stock prices still down because of the current bear market and many companies increasing their dividends, yields on some of the best dividend stocks are at their most attractive levels in years.
Three dividend stocks that currently stand out are American Tower (AMT -0.02%), Prologis (PLD 0.51%), and Realty Income (O 0.02%). All three have exceptional track records of growing their dividends, which offer attractive yields these days. That makes them great buys right now.
Up to an enticing level
American Tower stock has tumbled about 30% from its peak last year. That has driven the data infrastructure REIT's dividend yield up to its best level this decade:
AMT Dividend Yield data by YCharts
The REIT has an exceptional track record of growing its dividend. It has expanded the payout at a more than 20% compound annual rate since converting to a REIT in 2012. While its growth rate has slowed in recent years, it still delivered an impressive 12.5% dividend increase last year.
American Tower expects to continue growing that dividend at a healthy pace. It anticipates delivering a 10% increase in 2023. While the REIT is currently facing some growth-related headwinds that will impact its results this year, it has ample financial flexibility to continue growing its payout and data infrastructure portfolio. That puts it in a great position to capitalize on the growing demand for data infrastructure that should reaccelerate growth in the future.
Ample embedded growth drivers
Prologis' stock is also down about 30% from its peak. That has pushed the industrial REIT's dividend yield up to 2.6%, which is approaching its best level in years:
PLD Dividend Yield data by YCharts
Prologis has grown its dividend at a 12% compound annual rate over the last five years. That's double the REIT sector's 6% average and even faster than the S&P 500's 5% average. The company recently declared its latest dividend, increasing it by 10% from the last payment.
Prologis should continue growing its payout at an above-average rate. The REIT has yet to fully capture the significant surge in warehouse rental rates in recent years because of the long-term nature of its leases, and Prologis forecasts that its net operating income will grow at an 8% to 10% annual rate for the next several years without any further rent growth. Add the potential for further rent growth to the expected continued boost from future acquisitions and development projects, and Prologis should grow even faster.
The steady growth continues
Shares of Realty Income have fallen about 13% from their peak last year. While the stock price has fallen, the dividend continues to rise.
The company has an elite dividend growth track record stretching over its 27-year history as a public company, one of the longest streaks in the REIT sector. Its continued dividend growth -- the payout has risen 3.2% over the past year -- has helped push its dividend yield up to 4.7%. That's approaching its best level since the early days of the pandemic.
The REIT should continue growing its dividend in the future. It has a strong financial foundation, -- including a conservative dividend payout ratio and one of the strongest balance sheets in the REIT sector -- giving it lots of flexibility. Meanwhile, it will have plenty of opportunities to acquire additional income-producing real estate to grow its rental income and dividend in the coming years.
Exceptional income producers
American Tower, Prologis, and Realty Income are attractive options for income seekers these days. Their shares are down sharply while their dividends keep rising, pushing their yields to enticing levels. With more growth ahead, they look like great long-term buys for income-seeking investors right now.
