Financial markets are always uncertain, but sometimes they are more uncertain. Right now, geopolitical concerns have investors on edge, with the market whipsawing, sometimes within the same day, between large losses and large gains.
High-yield dividend stocks like Realty Income (O +0.49%) and Federal Realty (FRT 1.54%) let you focus on something other than stock prices.
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Boring is beautiful in turbulent times
Realty Income is one of the most boring real estate investment trusts (REITs) you'll come across. That is by design, as the company's core goal is to provide investors with a reliable and growing dividend. It has achieved that aim, noting it has three decades of annual dividend increases.
The company's portfolio is focused on single-tenant retail properties leased on a net basis. A net lease requires the tenant to pay most property-level operating costs. With more than 15,500 properties across the United States and Europe, Realty Income is by far the largest player in the net lease space.
It is a tortoise, given its large size, but slow and steady is pretty attractive in turbulent times. And so is the stock's lofty 4.8% dividend yield.
NYSE: O
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Federal Realty is the REIT "king"
Federal Realty is also focused on retail assets, but it owns strip malls and mixed-use developments. Unlike Realty Income, Federal Realty takes a quality-over-quantity approach, owning a portfolio of only about 100 properties. That said, the properties are much larger, and management ensures they are in high-population areas with wealthy residents and high barriers to entry.
NYSE: FRT
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In addition, Federal Realty is a highly active portfolio manager. It is always redeveloping its properties to keep them in high demand with its tenants and consumers. But it is also happy to sell assets that have reached their full potential, so it can buy new properties that may be in need of a little attention.
This model has worked very well over time, with the company increasing its dividend annually for more than five decades. It is, in fact, the only REIT to have achieved Dividend King status, which is for companies that have raised their dividends for 50 consecutive years or more. Now add in the well-above-market 4% dividend yield, and you can see why investors might appreciate Federal Realty.
The big benefit is sleeping well
The reason to double up on Realty Income and Federal Realty as geopolitical issues flare up is their proven dividend histories and high yields. Instead of worrying about which way the market is heading, you can watch your dividend checks reliably roll in.
Investors often underestimate the value of a good night's sleep -- until they can't sleep anymore. Realty Income and Federal Realty can help you become a sound sleeper again.
