Real Estate Investment Trusts (REITs) have long been a favorite among investors seeking stable income with the potential for growth. These investment vehicles are required to distribute at least 90% of their taxable earnings as dividends, making them attractive options for those looking for high dividend yields. In 2024, three REITs stood out for massively increasing their dividend payments, showcasing their resilience and potential for investors.
1. Summit Hotel: Hotel REIT’s Dividend Recovery Post-Pandemic
- Company: Summit Hotel Properties (NYSE:)
- Dividend Increase: 36% in 2024
- Dividend: $0.30 per share (up from $0.22 in 2023)
- Indicated Dividend Yield: 4.7%
- Payout Ratio: 31% (based on adjusted funds from operations)
Summit Hotel Properties bounced back from the challenges of the pandemic, with its dividend payments recovering strongly in 2024. The company’s commitment to steadily increasing its annual dividend payments over the years demonstrates its reliability and potential for growth. With a sustainable payout ratio based on adjusted funds from operations, Summit Hotel Properties presents an attractive option for income-seeking investors.
2. Veris: Upscale Apartment REIT with Impressive Dividend Growth
- Company: Veris Residential (NYSE:)
- Dividend Increase: 150% in 2024
- Dividend: Over $0.26 per share (up from under $0.11 in 2023)
- Indicated Dividend Yield: Over 2%
- Payout Ratio: Below 40%
Veris Residential’s focus on upscale multifamily properties and sustainability-conscious residents has proven to be a winning strategy. With a significant increase in its dividend payments and sustainable payout ratio, Veris Residential offers investors a compelling opportunity to benefit from the demand for high-quality rental properties in key markets.
3. RLJ: Premium Hotel REIT with Strong Dividend Growth
- Company: RLJ Lodging Trust (NYSE:)
- Dividend Increase: 39% in 2024
- Dividend: $0.50 per share (up from 2023)
- Indicated Dividend Yield: Nearly 5.9%
- Payout Ratio: Around 35%
RLJ Lodging Trust’s consistent dividend growth and focus on premium-branded hotels position it as a strong contender in the REIT market. Despite challenges in 2020, the company has rebounded with substantial dividend increases and a sustainable payout ratio. With a portfolio of urban-centric properties expected to outperform the industry, RLJ Lodging Trust presents an opportunity for investors seeking growth and stability.
In conclusion, investing in REITs like Summit Hotel Properties, Veris Residential, and RLJ Lodging Trust can provide investors with a source of reliable income and potential for growth. These companies have demonstrated their ability to navigate challenges, adapt to changing market conditions, and reward investors with increasing dividend payments. By diversifying your portfolio with these high-performing REITs, you can build a solid foundation for financial success and secure your financial future.