One of the many great things about investing in dividend stocks is that they don't typically cost a lot of money, making it easy for beginners to get started. Meanwhile, you can routinely buy more shares as you have additional cash to invest, enabling you to steadily grow your dividend income.
Several great dividend stocks currently cost less than $175 per share, including EastGroup Properties(NYSE: EGP), Mid-America Apartment Communities (NYSE: MAA), and Extra Space Storage (NYSE: EXR). Buying any one of that trio would set you up to generate a growing stream of passive dividend income.
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Decades of dividend stability and growth
EastGroup Properties has been a terrific dividend stock over the years. The real estate investment trust (REIT) has paid 179 consecutive quarterly dividends. It has either maintained or increased its payout for 32 straight years, raising it in 29 of those years, including the past 13 in a row. It most recently boosted its payment by 10.2% in August, raising the quarterly level to $1.40 per share, or $5.60 annually.
The industrial REIT's stock price is currently around $172 per share. That gives it a roughly 3.3% dividend yield, which is more than double the S&P 500's dividend yield of 1.2%.
EastGroup Properties has built half its portfolio from the ground up, investing $3 billion to develop 263 properties. It builds in business park settings, which increases returns and lowers risk. The REIT will also acquire properties in its existing markets, which include leading cities across the Sun Belt region, typically focusing on those with value-add opportunities, such as redevelopment, expansion, and leasing upside. These investments have steadily grown its portfolio and rental income, enabling the REIT to routinely raise its dividend.
Built-in growth ahead
Mid-America Apartment Communities, MAA, also has an excellent record of paying dividends. The apartment-focused residential REIT has paid 123 consecutive quarterly dividends at either the same rate as the prior payment or a higher level. It has raised its payment for 14 years in a row, including by 5% last December to $1.47 per share, or $5.88 annually.
The landlord's stock price is currently around $161 per share. That gives it a 3.7% dividend yield.
MAA owns a growing portfolio of apartment communities across the Sunbelt region. It focuses on metro areas benefiting from strong employment and job growth, which drives demand for apartments.
The REIT is investing heavily in expanding its apartment portfolio. It invested over $450 million into five recently developed or acquired properties that it's currently leasing up. Meanwhile, it's investing nearly another $1 billion into eight additional development projects that should stabilize over the next few years. These new investments will grow its rental income, which should enable the REIT to continue raising its dividend.
The leader in its space
Extra Space Storage has grown its dividend briskly over the years. While the self-storage REIT hasn't increased its payout every year, it has boosted its dividend by nearly 250% over the past decade. It most recently raised the payment by 8% in February 2023.
Shares of the REIT currently cost less than $169 apiece. That gives it a 3.9% dividend yield at the current rate.
Extra Space Storage is the leader in the U.S. self-storage sector, with a 14% market share. It has grown through a series of acquisitions and other platform additions. The company most recently merged with Life Storage in a $15 billion deal to create the U.S. self-storage market leader. Extra Space has also built the sector's leading third-party management platform and provides bridge loans to self-storage developers. Those programs open the doors to additional growth opportunities as the REIT often acquires properties it manages and developments it funds. These investments have helped grow the REIT's portfolio and income, enabling it to increase its dividend.
Low-cost ways to build dividend income
EastGroup Properties, MAA, and Extra Space Storage have great records of paying dividends. While they haven't increased their payments every single year, they have raised their dividends many times over the decades. That upward trajectory should continue. With relatively affordable price points, they're great dividend stocks to buy for those seeking to build streams of stable and steadily rising dividend income.
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Matt DiLallo has positions in EastGroup Properties and Mid-America Apartment Communities. The Motley Fool has positions in and recommends Mid-America Apartment Communities. The Motley Fool recommends EastGroup Properties and Extra Space Storage. The Motley Fool has a disclosure policy.
