Investing in dividend-paying stocks is one of the easiest ways to generate passive income. While you can find dividend stocks in all sectors, real estate stands out as a top spot for income since many real estate investment trusts (REITs) pay attractive dividends that steadily grow. Five REITs that look like excellent buys for income this April are Agree Realty (ADC 0.63%), Camden Property Trust (CPT 1.11%), Extra Space Storage (EXR +0.85%), Realty Income (O 0.95%), and W. P. Carey (WPC 0.56%).
Lots of room to continue growing
Agree Realty is a great passive-income producer. The REIT pays a monthly dividend that currently yields 4.2%. The company has grown that payout at a 6.1% compound annual rate over the last 10 years.
NYSE: ADC
Key Data Points
The REIT grows by acquiring single-tenant retail properties leased to high-quality tenants in sectors resistant to e-commerce. It has a long runway to continue growing because high-quality retailers own over 160,000 properties, giving Agree Realty a large pool of potential acquisitions. Future deals should enable the REIT to keep increasing its dividend.
Benefiting from rising demand for housing
Camden Property Trust's dividend currently yields 3.8%. The residential REIT has steadily increased its payout over the last decade. That upward trend should continue as Camden benefits from rent growth and investments to expand its portfolio. The company has six apartment and single-family rental communities under development in cities benefiting from above-average population and job growth. Meanwhile, it has the land to build several more communities. Those new communities should grow its rental income, enabling the REIT to keep increasing its dividend.
Plenty of space to continue growing
Extra Space Storage offers a dividend yielding 4% these days. The self-storage REIT has delivered supercharged dividend growth over the past decade, increasing the payout by 548%.
NYSE: EXR
Key Data Points
Driving that growth has been expanding demand for self-storage space. That has enabled the REIT to raise rates and expand its portfolio. A key growth driver has been its industry-leading third-party management business, which allows it to grow its income without much capital investment. Given the fragmentation of the self-storage market, Extra Space has plenty of room to grow its management platform and portfolio. It recently agreed to acquire rival Life Storage (LSI +0.00%), further bolstering its ability to grow the dividend.
Expanding its opportunity set
Realty Income's dividend yields 4.8%. The REIT has increased that payout, which it pays monthly, 120 times since its public market listing in 1994, including twice already this year.
That upward trend should continue. The REIT has an enormous growth runway to continue acquiring income-producing real estate. Meanwhile, it has expanded into several new verticals over the past year, including making its first acquisitions in gaming, consumer-centric medical, Italy, and vertical farming. With a top-notch balance sheet, it has plenty of flexibility to continue expanding its portfolio and dividend.
NYSE: O
Key Data Points
Dual growth drivers
W. P. Carey pays a 5.5%-yielding dividend. The diversified REIT has increased that payout every year since its public market listing in 1998.
W. P. Carey owns a diversified portfolio of operationally critical real estate across the warehouse, industrial, retail, self-storage, and office sectors. It leases those properties to high-quality tenants. Many of its leases contain provisions enabling it to raise rents at a rate tied to inflation. In addition, W. P. Carey has a long history of acquiring income-producing real estate. Those growth drivers should enable the REIT to continue increasing its payout.
Top-notch income producers
Agree Realty, Camden Properties, Extra Space Storage, Realty Income, and W. P. Carey all pay attractive dividends. Meanwhile, the REITs have excellent track records of growing those payouts. With more growth likely, they're great stocks to buy this month for those seeking to generate passive income.
