The Safest Dividend Is The One That's Just Been Raised

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As John D. Rockefeller erstwhile famously said:

The only point that gives maine pleasance is to spot my dividends coming in."

Now, astir cognize that Rockefeller collected a batch of dividends successful his life via his banal holdings in Standard Oil, successful which he had a near-monopoly connected nan lipid business successful nan U.S.

He lived to beryllium 97 years aged aft turning his $4,000 finance (in a Cleveland refinery) into 1 of nan largest fortunes successful modern quality history. At nan clip of his decease successful 1937, his nett worthy was adjacent to $340 cardinal aft adjusting for ostentation and taking into relationship comparative GDP astatine nan time.

For astir 80 years, that inflation-adjusted nett worthy made Rockefeller by acold nan richest American of each clip and nan richest quality successful modern history. He was overtaken by Elon Musk connected November 4, 2021.

So why are dividends truthful important?

Remember that dividends opportunity a batch astir a institution and is 1 of nan main ways businesses pass financial wellness and shareholder value. That's because a dividend sends a clear connection regarding nan maturity of nan institution and its wide financial health.

After all, companies pinch nan expertise to administer profits and summation nan size of nan dividend payments complete clip usually grounds coagulated fundamentals. Importantly, companies that salary retired dividends are superior astir attracting investors and retaining their loyalty by rewarding them frequently.

That's precisely why our squad is laser-focused connected dividends, because we admit that dividend maturation is nan concealed constituent for achieving ace full returns. Whenever a institution has mediocre dividend policies, we mostly debar buying nan shares.

For example, see Gladstone Commercial Corporation (GOOD), a existent property finance trust, aliases REIT, that I person been antagonistic connected for rather immoderate time.

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That article had complete 200 comments, and galore of them were from readers who disagreed pinch my bearish viewpoint:

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That's right, I've been "playing nan aforesaid opus for 7 years," suggesting that GOOD whitethorn trim its dividend…

Guess what?

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On January 10, 2023 GOOD trim its dividend by 20%, and Mr. Market reacted…

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But let's look astatine GOOD complete nan past 10 years and comparison pinch a nett lease REIT stalwart, Agree Realty Corporation (ADC):

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Get my point?

Dividend maturation stocks are nan ones to own, and you must ever analyse each prospective institution intimately to find whether its dividend is growing, and if it's not, ever inquire yourself why…

Okay, capable punishment and gloom…and I dream you avoided buying GOOD…

Let's attraction connected 5 of my apical dividend maturation REITs, and earlier we get started, please watch this video below:

Booyah Pick #1: VICI Properties Inc. (VICI)

VICI Properties Inc. is simply a existent property finance spot successful nan gaming assemblage that specializes successful hospitality and intermezo destinations. Their properties see Caesars Palace, MGM Grand and nan Venetia Resort successful Las Vegas, to sanction immoderate of nan much recognizable destinations.

While nan bulk of their astir well-known properties are successful Las Vegas, they are well-diversified pinch a full of 49 gaming accommodation successful 15 states and Canada that screen astir 124 cardinal quadrate feet and incorporate astir 59,300 edifice rooms and astir 450 bars and restaurants.

VICI - Investor Presentation

In December 2022, VICI entered into a waste / leaseback statement pinch Foundation Gaming to get nan Fitz Casino & Hotel and nan WaterView Casino & Hotel for $293.43 million.

The triple nett lease has an first word of 15 years, pinch built-in rent escalation of 1.0% successful years 2 and 3 and nan greater of 1.5% aliases CPI aft twelvemonth 4 (capped astatine 3.0%).

The transaction was executed astatine an 8.3% headdress complaint pinch 2.0x first rent sum and is expected to beryllium instantly accretive to AFFO per share. The acquisition expands VICI's home beingness into Vicksburg, Mississippi and makes Foundation Gaming VICI's 10th tenant.

VICI - Transaction Overview

In January 2023, VICI branched retired internationally pinch their $200.8 cardinal dollar acquisition of 4 casino properties successful Canada from PURE Canadian Gaming Corp ("PURE").

VICI and PURE entered into a triple nett maestro lease pinch an first lease word of 25 years astatine an acquisition headdress complaint of 8.0% pinch 1.8x first rent coverage. The lease provides for yearly rent escalation of 1.25% successful years 2 and 3 and past 1.5% aft twelvemonth 4 pinch escalations tied to nan CPI (capped astatine 2.5%).

PURE is 1 of nan starring gaming operators successful Canada and nan largest successful Alberta and will go VICI's 11th tenant. VICI expects nan transaction to beryllium instantly accretive to AFFO per stock owed to nan charismatic dispersed to their costs of capital.

VICI - Transaction Overview

VICI has bully indebtedness metrics pinch a Net Leverage ratio of 5.8x (Latest Quarter Annualized) and an finance people balance sheet pinch a BBB- in installments rating. 100% of their indebtedness is fixed complaint and 90% is unsecured. Their outstanding indebtedness has a 6.9 weighted mean to maturity and nary maturity comes owed until 2024.

VICI - Investor Presentation

VICI presently has a dividend output of 4.52% and has raised its dividend each twelvemonth since becoming a nationalist company. VICI has delivered quarter-over-quarter increases chiefly ranging betwixt 8 and 11%, and since 2019 has an mean dividend maturation complaint of 10.8%. The dividend is good covered pinch an AFFO (Adjusted FFO) payout ratio of 78.13% successful 2022.

VICI - Investor Presentation

Currently VICI is trading astatine a blended P/FFO ratio of 17.77x, which is simply a flimsy premium to their normal P/FFO of 16.18x. They person beardown FFO maturation astatine 7.47% and are expected to summation FFO by 10% successful 2023. VICI's dividend way grounds is fantabulous successful some consistency and maturation and is good supported by nan maturation of its operational earnings. At iREIT, we complaint VICI Properties a BUY.

FAST Graphs

Booyah Pick #2: Invitation Homes Inc. (INVH)

Invitation Homes was founded successful 2012 earlier becoming publically listed successful 2017. INVH is simply a REIT that specializes successful azygous family homes and is 1 nan fewer REITS pinch this area of focus.

Currently, INVH is nan number 1 location leasing institution successful nan federation pinch astir 80,000 homes for lease crossed nan nation. Their homes are wrong adjacent proximity to schools and jobs and person astir 80% resident retention.

INVH is well-diversified geographically, pinch a peculiar attraction successful nan southeast and California pinch 95% of their gross coming from nan Sunbelt, Western U.S., and Florida.

INVH strategically acquires properties adjacent areas pinch higher-than-average occupation growth. Since 2012, regions wherever INVH homes are located had 2 times much occupation maturation and 38% much location value appreciation than nan U.S. average.

INVH - Investor Presentation

Invitation Homes has bully indebtedness metrics pinch a Net Debt to Adjusted EBITDAre of 5.7x, down from 6.2x nan anterior year, and a Fixed Charge Coverage ratio of 4.3x.

They person an finance people in installments standing of BBB- and $1.87 cardinal successful liquidity. INVH has a comparatively precocious magnitude of secured indebtedness astatine astir 33.5% but has nary indebtedness maturity owed until 2025 (with hold options exercised).

INVH - Supplemental

Invitation Homes has delivered beardown maturation successful its Funds from Operations ("FFO"), pinch increases successful FFO successful each twelvemonth since its nationalist listing. Since 2018, INVH has had an mean maturation complaint of 7.97%, pinch Analysts projecting a 9% summation successful 2023 and a 6% summation successful 2024.

FAST Graphs (data compiled by iREIT)

Similarly, INVH has delivered beardown dividend maturation pinch an mean maturation complaint of 19.08% complete nan past 4 years. Currently INVH has a dividend output of 3.12% and connected February 3, 2023, they announced nan quarterly dividend would beryllium accrued from $0.22 to $0.26 per stock for an 18.2% summation successful its rate dividend.

INVH - Press Release

FAST Graphs (data compiled by iREIT)

In 2022, Invitation Homes accrued its dividend by 29.41%, and arsenic antecedently mentioned has an mean dividend maturation complaint of 19.08%. The dividend is very safe, pinch a batch of room for early maturation pinch an AFFO payout ratio of conscionable 62.41%.

FAST Graphs (INVH Dividend)

Currently INVH is trading astatine a blended P/FFO of 19.76x which compares favorably to its normal P/FFO aggregate of 21.93x.

The institution is 1 of nan fewer REITs pinch a attraction connected azygous family rentals and has delivered beardown maturation successful its costs from operations and dividends since going public. It is finance grade, pinch bully indebtedness metrics and has a comparatively safe AFFO payout. At iREIT, we complaint Invitation Homes a BUY.

FAST Graphs

Booyah Pick #3: Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI)

Hannon Armstrong is simply a Mortgage REIT ("mREIT") based successful Annapolis, Maryland pinch a attraction connected ambiance solutions. HASI provides superior to companies investing successful power efficiency, renewable energy, and different sustainable infrastructure markets.

HASI states its halfway intent arsenic making climate-positive investments while delivering superior risk-adjusted returns. Their imagination is truthful centric to their finance strategy that they require each imaginable investments to trim c emissions, aliases astatine slightest beryllium c neutral aliases person immoderate different use to nan situation specified arsenic reducing h2o consumption.

HASI divides its markets and plus classes into 3 categories: Behind-the-Meter, Grid-Connected, and Sustainable Infrastructure.

• Their Behind-the-Meter class includes facility-specific solutions specified arsenic star powerfulness generation, electrical storage, and ratio improvements pinch heating, aerial conditioning, ventilation, roofs, windows and lighting.
• HASI's Grid-Connected class includes assets to make wholesale electrical powerfulness from cleaner sources specified arsenic solar, star storage, and onshore wind.
• Their Sustainable Infrastructure conception includes assets that supply power strategy resiliency specified arsenic renewable earthy state plants, h2o systems, ecological restoration, and proscription fleet enhancements.

HASI - Investor Presentation

HASI has an finance people ("IG") standing by Moody's pinch a in installments standing of Baa3 but is conscionable 1 notch nether IG rated by S&P and Fitch pinch a in installments standing of BB+ (Junk). They person a 1.7x indebtedness to equity ratio and 93% of their indebtedness is fixed rate. Additionally, they person $1.2 cardinal successful liquidity and nary worldly indebtedness refinancing consequence until 2026.

HASI - Investor Presentation

HASI has consistently delivered beardown maturation successful its Operating Earnings per stock pinch an mean maturation complaint of 10.57% from 2016 to 2022. Operating Earnings are expected to turn by 7% successful 2023, 8% successful 2024, and 12% successful 2025.

Similarly, HASI's Distributable EPS has a three-year compound yearly maturation complaint of astir 11% and has covered nan dividend successful each twelvemonth since 2018. Their dividend payout arsenic a percent of distributable net was 74.47% successful 2021 and 70.18% arsenic of November 2022.

HASI - Investor Presentation

FAST Graphs (compiled by iREIT)

HASI has accrued its dividend each twelvemonth since 2015 pinch nan objection of 2018 wherever it remained level astatine $1.32. Overall HASI has been accordant pinch their dividend increases and has an mean dividend maturation complaint of 6.46% complete nan past 8 years.

FAST Graphs (compiled by iREIT)

FAST Graphs (HASI Dividend)

HASI presently offers a 4.21% dividend output and is trading astatine a blended P/E of 16.97x, which is nether their normal P/E ratio of 19.06x.

They person reliably paid and raised nan dividend that is good covered by distributable earnings, and they connection vulnerability to nan renewable power manufacture that is expected to grow complete time. At iREIT, we complaint HASI a Spec BUY.

FAST Graphs

Essential Properties Realty Trust, Inc. (EPRT)

Essential Properties Realty Trust is simply a triple nett lease REIT that owns single-tenant properties and specializes successful experience-based aliases service-oriented businesses. EPRT is successful 16 industries and has 329 tenants that inhabit 1,561 properties successful 48 states.

In each EPRT's existent property covers 14.4 cardinal quadrate feet. They person a 99.8% lease complaint and a weighted mean lease word ("WALT") of 14 years. 79.4% of their properties are classified arsenic service, 13.6% arsenic experience, and 4.2% arsenic retail. Their largest categories see Early Childhood Education, Quick Service Restaurants, Car Washes, and Medical / Dental offices.

EPRT - Portfolio

Essential Properties Realty Trust has bully indebtedness metrics and liquidity. They person $294 cardinal successful rate and afloat readiness connected their in installments installation of $600 cardinal for astir $900 cardinal successful full liquidity arsenic of nan 3rd 4th successful 2022.

EPRT has a Net Debt to Adjusted EBITDAre of 4.4x and a Fixed Charge Coverage ratio of 5.7x. EPRT's indebtedness is 100% fixed complaint and has a weighted mean to maturity of 5.5 years. Their weighted mean liking complaint is 3.3% pinch nary indebtedness maturity until 2024.

EPRT - Portfolio

Since their IPO successful June 2018 EPRT has delivered beardown maturation successful its costs from operations. Since 2019 they person averaged an yearly FFO maturation complaint of 11.59%. Analysts task FFO to summation by 4% successful 2023 and by 8% successful 2024.

FAST Graphs (compiled by iREIT)

Over their short history, EPRT has accrued its dividend each twelvemonth and has averaged a maturation complaint of 6.90% since 2020. Analysts are projecting a dividend summation of 2.8% successful 2023.

Along pinch nan patient maturation rate, nan dividend is very unafraid pinch an AFFO payout ratio of 70.26% successful 2022. The beardown FFO maturation on pinch nan debased payout ratio should supply plentifulness of cushion for nan dividend successful lawsuit of an adverse arena arsenic good arsenic supply plentifulness of room for early growth.

FAST Graphs (compiled by iREIT)

FAST Graphs (EPRT dividend)

EPRT is trading astatine a blended P/FFO of 15.97x which is good beneath their normal P/FFO aggregate of 19.19x. They presently salary a 4.37% dividend output and person delivered precocious maturation rates successful some FFO and nan dividend complete their short history.

They person a beardown balance sheet pinch bully indebtedness levels and a debased payout ratio. Additionally, their work and experience-based properties should beryllium good insulated from immoderate e-commerce threats. At iREIT, we complaint Essential Properties Realty Trust a BUY.

FAST Graphs

Booyah Pick #5: American Tower Corporation (AMT)

American Tower is 1 of nan largest REITs, pinch a marketplace capitalization of almost $100 cardinal and a world beingness successful 25 countries located connected 6 continents. AMT was founded successful 1995 and owns multitenant compartment towers.

Their portfolio includes much than 43,000 properties successful nan U.S. and Canada and astir 180,000 properties internationally, for a full of astir 223,000 connection sites. Cell Towers are basal for mundane activities specified arsenic sending a text, making a telephone call, ordering merchandise online, redeeming a image to nan cloud, sending an email, etc.

Towers are captious infrastructure and portion of nan e-commerce trifecta (along pinch information centers and logistic facilities), and without them galore of nan conveniences we bask each time would not beryllium possible. As we proceed into nan integer property and pinch nan rollout of 5G location are galore tailwinds to support early growth.

American Tower

American Tower has delivered maturation successful beautiful overmuch each metric complete nan past decade. Since 2011 AMT has grown conception gross by a compound yearly maturation complaint of 14.2% and their Adjusted Funds from Operations ("AFFO") astatine a compound yearly maturation complaint of 13.8% per share.

It makes consciousness that AMT has delivered specified maturation complete nan past decade, arsenic e-commerce and integer connection has really taken disconnected since that time. But different facet successful their maturation comes from their business model, successful that they tin sorb aggregate tenants per building pinch diminishing finance costs arsenic much tenants stock nan aforesaid infrastructure.

AMT - Investor Presentation

As illustrated below, adding further tenants increases gross while costs stay comparatively flat. The superior costs associated pinch compartment towers is nan building and upgrade costs that would beryllium incurred sloppy of really galore tenants lease nan space.

As much tenants are added, full gross increases proportionally, but location is nary further building costs and operating expenses are only marginally impacted. This leads to a higher Return connected Invested Capital ("ROIC") for each further tenant.

AMT - Investor Presentation

Between nan structural advantages of their business exemplary and nan wide expanding request for integer networking, American Tower has delivered awesome maturation rates successful revenue, costs from operations ("FFO"), adjusted FFO, and their dividend rate. Since 2013, AMT has an mean FFO maturation complaint of 11.69% annually and an mean dividend maturation complaint of 20.70%.

Additionally, AMT has accrued its dividend each twelvemonth consecutively since 2013 and has accrued their FFO each twelvemonth complete nan aforesaid clip play pinch nan objection of 2019 erstwhile FFO declined by 1%. Analysts are projecting a 3% summation successful FFO successful 2023, followed by an summation successful FFO of 10% and 13% successful nan years 2024 and 2025 respectively.

FAST Graphs (compiled by iREIT)

Currently, AMT pays a 2.72% dividend output that is very good covered pinch an AFFO payout ratio of 58.89%. The truth that they are capable to turn nan dividend astatine astir 20% per year, while maintaining specified a debased AFFO payout is simply a testament to nan precocious net maturation they proceed to present that supports nan dividend.

Having specified a debased AFFO payout provides respective advantages. Obviously, it secures nan dividend and allows for early growth, but it besides allows AMT to clasp much rate for early investment.

Funding a information of their investments pinch retained net lowers their wide costs of superior arsenic opposed to issuing indebtedness aliases equity. That's not to opportunity AMT does not request to raise superior by issuing indebtedness and equity, but nan much they tin money investments pinch retained earnings, nan little their wide costs of superior should be.

FAST Graphs (AMT Dividend)

American Tower has bully indebtedness metrics that person improved complete nan anterior twelvemonth pinch their Net Leverage ratio going from 6.8x successful 2021 to 5.5x arsenic of 9/30/2022. Likewise, they improved nan magnitude of floating indebtedness from 31% successful 2021 to 23% successful 2022. AMT has plentifulness of barren powder pinch $7.0 cardinal successful liquidity and person an mean word to maturity of 5.9 years.

AMT - Earnings Presentation

Currently AMT trades astatine a P/FFO aggregate of 21.68x which is somewhat nether their normal P/FFO of 22.92x. This is simply a high-quality bluish spot REIT pinch sound indebtedness metrics and an investment-grade in installments standing of BBB-.

They person delivered outstanding maturation successful revenue, FFO, AFFO, and dividend increases complete nan past decade and person plentifulness of room for early growth, fixed nan tailwinds of e-commerce and integer networking. At iREIT, we complaint American Tower a BUY.

FAST Graphs

Booyah!

Are you acquainted pinch nan Booyah button?

I'm not judge he coined nan word, but I do cognize that it became celebrated successful nan financial world acknowledgment to Jim Cramer. He would outcry nan connection "Booyah" whenever he saw location was a celebrated trade.

At Wide Moat Research, we for illustration to outcry retired nan connection "Booyah" whenever a institution raises its dividend, because arsenic you know,

"The Safest Dividend is nan 1 that's conscionable been raised."

Happy SWAN Investing!

Editor's Note: This article discusses 1 aliases much securities that do not waste and acquisition connected a awesome U.S. exchange. Please beryllium alert of nan risks associated pinch these stocks.