The REIT duo has been increasing dividend payouts consistently for more than ten years now.
But you know, you don’t necessarily have to be an income-focused investor to appreciate dividend-paying stocks. In general, companies that return profits to shareholders tend to perform better than those that don’t.
According to Hartford Funds and Ned Davis Research, benchmark average dividend-paying stocks in the S&P 500 yielded an annual return of 9.2% over the past 50 years, ending in 2024.
Realty Income (-0.21%) and Alexandria Real Estate Equities (0.34%) are two dependable dividend stocks offering an average yield around 6% at current prices. So, whether you’re looking for elevated returns or to boost your passive income, adding these could be worthwhile.
1. Realty Income
This REIT’s stock has dropped roughly 23% from its high in 2022.
Back in June, Realty Income announced its 131st dividend increase since its inception in 1994. Despite some declines over recent years, this reliable dividend payer has maintained its distributions. At recent prices, it’s yielding an attractive 5.6%.
While Realty Income’s dividend payments are steadily increasing, their growth rate has slowed down compared to previous years. This, along with rising risk-free interest rates from Treasury yields, explains the pressure on dividend stocks.
Realty Income operates as a net lease REIT, meaning the tenant is responsible for various ownership costs like taxes and maintenance. As of late March, 98.5% of its properties were leased, with an average remaining lease period of one year. The cash flow remains predictable since rent escalators are part of long-term leases.
Even as borrowing costs rise, this established REIT has access to capital on terms that smaller companies can only dream of. With an A3 credit rating from Moody’s and evaluations from S&P Global, Realty Income recently issued long-term bonds totaling 1.3 billion euros at an average yield of 3.7%.
Publicly traded net lease REITs represent about 4% of the U.S. market, and similarly in Europe, where it’s under 0.1%, suggesting ample room for expansion. With comparatively lower borrowing costs, Realty Income can select tenants likely to keep up with rents. It may not be the most thrilling stock, but it could be a low-stress choice in your portfolio.
2. Alexandria Real Estate Equities
Shares of Alexandria Real Estate Equities have plummeted around 63% since their peak at the end of 2021, yet the REIT’s dividend has been on an upward trajectory since 2009, currently providing a noteworthy 6.4% yield at present prices.
This specialized REIT focuses on acquiring and developing properties within the life sciences sector, which saw significant investments during the COVID-19 pandemic. Sadly, interest in biotech startups started to wane dramatically in 2022.
Roughly 53% of Alexandria’s annual rental income comes from tenants with stock market listings or strong credit ratings. Given that nearly half of its rental revenue is still coming from biotech companies, investors had valid concerns when the company adjusted its forecasts downwards twice this year.
However, Alexandria could be considered a solid buy right now, with potential for a meaningful dividend hike, despite recent downward adjustments to its guidance. The management reduced FFO expectations to approximately $8.31 per share, down from $8.11, still exceeding its current dividend obligations set at $5.28 per share.
While the current climate might not be favorable for startup biotech firms, Alexandria has successfully attracted established pharmaceutical companies looking to expand. Recently, it secured a significant 16-year lease for over 466,000 square feet, its largest lease to date.
Rental increases have not been a problem for Alexandria. In the first half of 2025, it reported a rental fee hike of 13.2%.
This challenging period for startup biotech companies may make things uncomfortable for Alexandria’s shareholders over the next year or two. Still, it’s crucial to bear in mind that many illnesses lack treatment options. This opens the door for growth in drug development companies. While Alexandria’s growth might not return until 2025 or 2026, for those willing to invest now and wait, there’s potential for yields exceeding 10% over a decade. Therefore, incorporating some of these shares into a diverse portfolio seems like a sensible strategy for long-term investors.
