John D. Rockefeller once said, "Do you know the only thing that gives me pleasure? It's to see my dividends coming in." While I personally find many other things more pleasurable than seeing dividend payments deposited in my brokerage account, I agree that there's something very satisfying about getting paid for work someone else did.
Given my fondness for dividend stocks, I own many of them. However, my favorite by far is Realty Income (O +0.88%). Here's why.
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The epitome of what a dividend stock should be
Realty Income is a dividend lover's dream stock. One thing that sets the real estate investment trust (REIT) apart from others is its dividend payment frequency. While most companies pay dividends quarterly, Realty Income is a monthly dividend stock. That payment frequency enables it to delight dividend investors every single month.
The REIT also stands out for how often it increases its dividend. While many companies strive to increase their payouts annually, Realty Income has raised its payment for 112 consecutive quarters. It has hiked its dividend by as much as six times in some years. Overall, Realty Income has raised its dividend 132 times since its public market listing in 1994 (including five times this year), growing it at a 4.2% compound annual rate.
NYSE: O
Key Data Points
Another great aspect of Realty Income's dividend is its yield. It's currently at 5.7%, which is several times higher than the S&P 500's yield (1.2%). That higher yield enables me to generate a lot more income from every dollar I invest in the REIT compared to lower-yielding options.
Realty Income backs its high-yielding payout with a high-quality real estate portfolio and rock-solid balance sheet. Meanwhile, its strong financial profile puts it in an excellent position to continue growing its portfolio and dividend.
That's why, of all my holdings, Realty Income is my favorite. It provides me with reliable and growing dividend income, giving me true peace of mind as an income investor.
