Invest in Reliable Real Estate Shares for Steady Passive Earnings
In the realm of Real Estate Investment Trusts (REITs), two names that stand out are Essex Property Trust and Federal Realty Investment Trust. Both companies have a strong track record of success, each with its unique focus and achievements.
Essex Property Trust, headquartered in San Mateo, California, USA, specialises in the residential sector, with a sole focus on the West Coast. Over the past 20 years, Essex Property Trust's core funds from operations (FFO) have seen a significant increase of 276%. The company's same-property net operating income has grown by 126% during the same period. Notably, Essex Property Trust has raised its dividend at more than double the average pace of its peers. The current dividend yield stands at 3.72%.
On the other hand, Federal Realty Investment Trust seeks to own the best retail-oriented properties in high-density areas of high-income earners. The company owns high-quality mixed-use properties and open-air shopping centers in first-ring suburbs of strategically selected metro markets. Federal Realty Investment Trust's FFO per share has increased by more than 134% since 2005. The company has also increased its dividend for a REIT sector-leading 58 consecutive years. The current dividend yield is 5.43%.
Recently, Federal Realty Investment Trust sold a 181,000-square-foot portfolio of retail properties for $69 million and a 108-unit residential property for $74 million. These funds were used to buy two dominant open-air retail centers in Kansas City for $289 million. Federal Realty Investment Trust sells properties with limited growth potential to fund new investments in higher-quality properties.
Realty Income, another notable REIT, focuses on investing in properties with long-term net leases. The company's adjusted FFO per share has increased at a more than 5% annual rate, and its dividend has grown at a 4.2% compound annual rate. Realty Income has only had one year when it didn't grow its adjusted FFO per share (2009). Since becoming a public company, Realty Income has increased its dividend for 31 consecutive years by a cumulative 516%.
Essex Property Trust maintains a conservative dividend payout ratio and a strong balance sheet, ensuring a steady stream of income for its shareholders. Both Essex Property Trust and Federal Realty Investment Trust are exemplary choices for investors seeking stable, long-term returns in the REIT sector.
