It’s been a roller coaster year for investors, with the benchmark S&P 500 dipping into correction territory and flirting with a bear market earlier this month. With the Trump administration vowing to implement tariffs that might depress business activity, volatility has taken center stage.
Given the sell-off, now is a good time to consider adding dividend stocks to your portfolio. These companies display a history of strong capital management, outperform their non-dividend counterparts, and exhibit less volatility. Here are three excellent dividend payers to consider buying today.
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Realty Income (NYSE: O) is appealing to investors because of its monthly dividend payment. The real estate investment trust (REIT) has a dividend yield of 5.6%, backed by its retail property footprint, which includes over 15,600 properties and tenants like 7-Eleven, Dollar General, and Walgreens.
Realty Income generates strong cash flow by using triple net leases, meaning tenants are responsible for property taxes, maintenance, and insurance. As a result, it can offer lower rents while still producing a steady cash flow.
This business model creates a reliable income stream since the company doesn’t have to absorb property costs, which can fluctuate over time. This has been particularly important in recent years, when insurance costs and other expenses have risen with inflation.
Tenants benefit from renting because it lets them avoid risks associated with declining property values and asset depreciation. It also provides greater flexibility to relocate or close down operations without the burden of managing the property.
The risk for Realty Income is a slowdown in consumer spending leading to a widespread economic downturn. This could affect retailers, which could see sales dip, causing them to consolidate operations and break leases.
That said, the REIT has a well-diversified portfolio spread across tenants in various industries. No one industry makes up more than 10.2% of its annual base rent, and no tenant accounts for more than 3.5%.
The company has maintained a strong portfolio, and its average occupancy rate during the past quarter-century is 98.2%. Even during the Great Recession nearly two decades ago, Realty Income never saw occupancy dip below 96.6%.
Digital Realty Trust (NYSE: DLR) provides infrastructure for cloud computing, artificial intelligence (AI), and other technology through its data centers. Companies can rent space in these facilities, and the arrangement lets businesses share resources. They benefit from enhanced security, a reliable power supply, and effective cooling systems without the need to own their facilities.
