You won’t want to miss these 3 dividend stocks that are under the radar

Hundreds of companies pay dividends, making it easy to miss high dividend stocks. Lots of smaller companies that aren’t big enough to be in S&P500 they tend to drop off the radar most investors.

Industrial properties in Rexford (REXR -0.80%), Lifestyle properties of capital (ELS -0.76%)AND NNN REIT (NN -0.97%) are smaller real estate investment funds (REITs). Because of this, many investors underestimate how good they are at paying dividends. Here’s why it’s worth taking a closer look at them.

Her focused strategy is paying off big dividends

Rexford Industrial Real Estate is a company industrial REIT focuses on a single market: Southern California. This market has huge fundamentals. It is the largest industrial market in the country, which consistently has the highest demand and the lowest supply. These factors maintain high occupancy levels while stimulating strong rent growth, which has helped Rexford perform well over the past few years.

His funds from operations (FFO) have grown at a 16% compound annual growth rate (CAGR) over the past five years. That’s much faster than that the 9% CAGR their peers, helping dividends grow faster (18% CAGR over the last five years compared to 10% for peers).

There are significant internal growth drivers at Rexford Industrial. The combination of repositioning and redevelopment projects, rent increases and recently announced acquisitions will increase annual net operating profit by 35% over the next three years. This constitutes a strong foundation for further dividend growth in connection with the payment of this amount Already gives over 3%. Meanwhile, there is additional growth potential resulting from future dynamic acquisitions, which will make it even stronger the ability to continue to increase the dividend.

Going off the beaten path paid off big time dividends

Equity LifeStyle features include: Residential REIT focuses on manufactured home communities, RV resorts, campgrounds and marinas. Fewer real estate investors are focusing on niche property types, which creates less competition to purchase properties when they hit the market. This enabled the REIT to earn higher investment returns due to a higher initial rate real estate capitalization rate.

The fundamentals in these niche sectors are strong and solid. Move manufactured home is expensive, what makes it possible Equity LifeStyle will raise rents every yeareven during a recession. As a result, the company has grown its net operating income at a faster rate over the years (4.4% annually compared to 3.3% in the REIT industry since 1998).

These factors contributed to Equity LifeStyle’s high dividend growth rate. Since 2006, the REIT has increased its distributions at a compound annual rate of 21%. With a strong balance sheet and solid market fundamentals, Equity LifeStyle is well positioned for continued growth Efficiency 2.7%. dividend in the future.

An extraordinary record

NNN REIT has quietly amassed an incredible record of dividend growth. The retail REIT recently announced its 35th consecutive annual dividend increase. This is a rare feat. Only two other REITs and fewer than 80 publicly traded companies have achieved this milestone.

The REIT strategy is very simple and consistent. Buying for one tenant net lease commercial real estate. It focuses on well-located properties leased to emerging national and regional retailers such as auto service outlets, convenience stores and restaurants. A net lease structure provides predictable cash flows because tenants cover all operating costs, including ongoing maintenance, building insurance and property taxes.

NNN A REIT expands by acquiring additional income-generating retail properties, primarily through existing tenant relationships. These transactions have higher capitalization rates than market/auction transactions, which is reinforcing companies returns on investment. It has a low dividend payout ratio and a very conservative balance sheet, giving it great flexibility to continue making incremental property acquisitions as new opportunities arise. These transactions should enable the REIT to continue to steadily increase its holdings Efficiency 4.8%. dividend.

Small but mighty

Rexford Industrial Realty, Equity LifeStyle Properties and NNN REITs are smaller companies that many investors have probably overlooked. Because of this, they lost records of massive dividend growth. They should be able to continue to grow their payouts, which can make them a great addition to any investor’s income portfolio.

Matt DiLallo holds positions with Rexford Industrial Realty. The Motley Fool positions and recommends Rexford Industrial Realty. The Motley Fool has a disclosure policy.