3 Wealth-Creating Dividend Stocks to Boost Your Income in 2024

Dividend stocks can be very enriching investments. Their dividend payments can really add up over the years. Add that to a rising stock price, and dividend payers can produce market-crushing total returns.

Rexford Industrial Realty (REXR 0.47%), Extra Space Storage (EXR -0.27%), and Brookfield Infrastructure (BIPC -1.04%) (BIP -0.80%) have been very enriching investments over the years. That should continue. Because of that, they stand out to these three Fool.com contributors as top dividend stocks to buy for 2024 for those seeking to boost their income (and capitalize on their upside potential).

Don't overlook the lower yield

Tyler Crowe (Rexford Industrial Realty): One of the common traps for income investors is to mistake higher-yield options as the better choice. That isn't always the case. Rexford Industrial Realty is a great example of this.

As of this writing, the industrial REIT has a dividend yield of 2.71%. That's relatively low by REIT standards. Many investors looking at industrial REITs will probably gravitate toward others with a higher yield, say Stag Industrial and its 3.8% dividend yield.

However, over the long haul, Rexford's stock has walloped Stag's in terms of total returns (share price appreciation and dividends). Rexford has also run laps around the Vanguard Real Estate ETF.

REXR Total Return Level data by YCharts

A few things are working in Rexford's favor to generate such spectacular results. One is its focus on one industrial real estate market: the Los Angeles-San Diego megalopolis.

This is one of the best markets for industrial real estate. It's big (it's larger than all of Germany's), it's in demand (vacancy rates are less than 2%), and it's lucrative (rent per square foot in is one of the highest in the nation). These factors have translated to Rexford posting the best funds from operations (FFO) per share in the industry over the past five years at 15% annually.

Dividends are more than just yield -- they are a portion of your total return on investment. Rexford is an excellent example of why investors looking for good dividend stocks need to look beyond just the yield.

An industry-leading wealth creator

Matt DiLallo (Extra Space Storage): Extra Space Storage has been one of the top-performing REITs over the past decade. The self-storage REIT has produced a more than 400% total return over the last 10 years (17.6% annualized). That has pulverized the S&P 500's total return (212%, or 12% annualized).

The company has achieved those outsized returns by delivering sector-leading growth:

Data source: Extra Space Storage. Table by author.

A big factor driving Extra Space Storage's faster growth has been its industry-leading third-party management platform. At nearly 1,300 locations, the company has roughly double the number of third-party managed stores compared to CubeSmart and over 1,000 more than Public Storage. This business generates very high margin management fees and insurance income for a very low capital investment.

The company has also grown its income by steadily raising rates at existing locations and acquiring new ones. It recently acquired fellow self-storage REIT LifeStorage in a transformational deal that created the largest player in the sector. It beat out Public Storage to acquire LifeStorage, enabling it to leapfrog its rival as the industry leader.

That acquisition will immediately boost its FFO while enhancing its long-term growth profile. The combined company has many growth drivers, including acquisitions, third-party management platform expansion, credit investments (bridge lending and preferred equity), and site expansions.

Extra Space's growth drivers put it in a strong position to continue increasing its dividend, which currently yields 4.3%. While it likely won't grow its payout at the same blistering rate it has achieved in the past, the REIT could continue delivering sector-leading dividend growth and total returns.

Keeping the world spinning (and investors getting paid)

Jason Hall (Brookfield Infrastructure): Real estate, as my esteemed colleagues describe in their stock picks, is a great way to generate steady, growing income. A category of assets that's very real estate like in this regard is infrastructure -- things like roads, power transmission lines, water and gas lines, and telecommunications assets like cell towers and data centers. They're almost like the "air" of the global economy. We never notice them until they're not available, and without them, commerce dies.

Owning these sorts of assets is Brookfield Infrastructure's business. Protected by moats including very high barriers to entry, as well as regulatory pressures that keep competition from even trying to enter existing markets, infrastructure is a fantastic way to get paid.

Over the past decade, Brookfield Infrastructure has doubled its dividend and also seen its stock price double. As a result, shareholders have enjoyed 241% in total returns. That works out to over 13% in annualized returns, a tidy sum.

However, a worried market has held shares back in 2023, turning this usual market-beater into a laggard. Fortunately, the business continues to hum along, earning 7% higher funds from operations in the third quarter, repurchasing about 1 million shares of stock while it's been down, and also freeing up $2 billion in proceeds from its regular pattern of selling off mature assets in advance of its next round of bargain hunting.

So while the market worries, savvy income investors are taking this opportunity to buy (or buy more) shares of this wonderful business while it's on sale.