There are different ways to use dividends when it comes to selecting investments. Often, dividend investors focus all their attention on the highest-yielding stocks. But you can also buy stocks with a history of attractive dividend growth. And right now, you can purchase these two dividend growers with well-above-market yields of as much as 4.2%. Here’s what you need to know.
1. Prologis is a giant industrial REIT that’s still growing quickly
With a nearly $100 billion market cap, Prologis (PLD) is one of the largest real estate investment trusts (REITs) you can buy. It is also quite easily the largest REIT focused on industrial properties. It owns a global portfolio of assets, so it is also fairly well diversified, geographically speaking.
The one thing Prologis focuses on is owning warehouses in the most important transportation hubs. That’s a problem right now due to concerns about tariffs. However, given the interconnectedness of global trade, it seems likely that the world will adjust to any tariff changes. And assuming that is the outcome, Prologis will again be viewed as a well-positioned REIT.
But not even the tariff upheaval has really changed Prologis’ trajectory. In the first quarter of 2025, it increased rents on renewing leases by a huge 32% on a cash basis. The average annualized dividend growth rate during the past decade was an attractive 11%, and the current 3.8% yield is near the high end of the REIT’s 10-year yield range.
As if that weren’t enough, the company has raised the dividend every year for more than a decade. If you like owning the biggest and the best when they go on sale, fast-growing Prologis could be the dividend stock for your portfolio.
Agree Realty is small but growing quickly
Agree Realty (ADC) is a net lease REIT, which means its tenants are responsible for most property-level operating expenses. It is not the largest player in the sector. That would be $50 billion market cap Realty Income (O -0.12%). But Realty Income is at a point where growth is modest. Agree Realty, given its smaller $8 billion market cap, is still capable of growing quickly.
Agree is focused on single-tenant retail properties in the U. S. These assets are fairly easy to buy, sell, and release as needed. And with a portfolio of more than 2,400 properties across all 50 U.S. states, it offers ample diversification within the niche it serves. It also has plenty of opportunities for growth, despite its focus on just one property type, as net lease retail is a huge sector. The dividend yield today is about 4.2%, which is about middle of the road for the REIT.
What you are really buying is the dividend growth rate, which has stood at more than 5% for the past decade. By comparison, Realty Income’s dividend growth rate over that span was roughly half that rate. If you are a growth and income investor, Agree stands out from the net lease pack today.
Go for dividend growth with these two REITs
You can find higher-yielding REITs pretty easily. But finding REITs that offer a combination of yield and attractive dividend growth prospects is a bit harder. However, that’s exactly what you will get with industrial property-focused Prologis and retail-focused Agree Realty. This pair of high-yielders won’t be right for every dividend investor, but for some, they will offer the perfect mix of income and income growth to make them attractive buys in July.
— Reuben Gregg Brewer
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Source: The Motley Fool
