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The S&P 500 has slumped in recent months. The index has fallen more than 15% from its recent peak, driven down by concerns that tariffs might cause a recession.
Many stocks have fallen even further than the index, including ExxonMobil (NYSE: XOM), Federal Realty Investment Trust (NYSE: FRT), and PepsiCo (NASDAQ: PEP), which are down 15% or more. They look like even more attractive investments for those seeking durable dividends that could last a lifetime.
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Adding more fuel to grow its dividend
Shares of Exxon have fallen more than 15% from their recent peak. That downdraft has driven the oil giant's dividend yield up to 3.8%. That's more than double the S&P 500's 1.4% dividend yield.
Exxon has a magnificent record of paying dividends. The company recently increased its payment by 4%, extending its dividend growth streak to 42 years in a row. Only 4% of companies in the S&P 500 have reached that milestone.
The company has plenty of fuel to continue growing its dividend. It produced $34.4 billion of free cash flow after funding its capital expenses last year, more than enough to cover its $16.7 billion dividend outlay. Meanwhile, Exxon's long-term strategic plan aims to increase its annual cash flow by $30 billion by 2030 through structural cost savings and investments in its lowest-cost assets.
Its focused strategy continues to pay dividends
Federal Realty's stock has slumped more than 20% from its recent peak. That sell-off has pushed up the dividend yield of the real estate investment trust (REIT) to 4.8%. The company has increased its dividend for 57 straight years. That leads the REIT sector and keeps it in the elite group of Dividend Kings, companies with 50 or more years of annual dividend growth.
The company has a simple strategy. It invests in the highest-quality shopping centers and mixed-use properties in the first-ring suburbs of the country's largest cities. Those locations typically have dense populations of high-income households, making them highly desirable for retailers. Federal Realty's properties tend to remain in high demand, enabling the REIT to steadily raise rental rates.
The REIT routinely invests to upgrade its portfolio. It will spend money to redevelop existing properties to make them more appealing to retailers. Federal Realty will also add new property types, such as residential units or offices. In addition, it will buy high-quality shopping centers as they go up for sale, often selling lower-quality properties to fund those new investments.