Big Yields, Big Companies, Big Investment Opportunities

Globe and Mail

18 hours ago

Key Points
Prologis is the largest industrial REIT, offering a historically high 3.8% yield.
Realty Income is the largest net lease REIT, offering an over 5.6% yield.
Simon Property Group is the largest mall REIT, with an attractive 5.2% yield.
Dividend investors looking for high-yielding stocks should spend some time examining real estate investment trusts (REITs). REITs are specifically designed to pass income on to investors. As the REIT sector has matured, however, a few companies have started to stand out and grow. Three such high-yield, industry-leading REITs you might want to buy today are Prologis (NYSE: PLD), Realty Income (NYSE: O), and Simon Property Group (NYSE: SPG). Here's why.
1. Out-of-favor Prologis has a historically attractive yield
Prologis is the lowest-yielding REIT on this list, with a dividend yield of "just" 3.8%. That yield is well above the 1.3% yield of the S&P 500 index (SNPINDEX: ^GSPC), but a touch below the roughly 4% yield of the average real estate investment trust. However, Prologis' yield is near the high end of its yield range over the past decade. That makes this REIT highly attractive, given the relatively rapid pace of dividend growth it has achieved.
Prologis is the largest industrial REIT, with a global portfolio of warehouses located in most of the vital distribution hubs of the world. The tariff issues swirling in the news have investors worried and downbeat on Prologis' stock, even though the business continues to perform fairly well. For example, adjusted funds from operations grew 10% year over year in the first quarter of 2025. The average annualized dividend increase over the past decade was over 10%.
If you don't mind buying while other investors are selling, Prologis is a giant industrial REIT that looks like it is on sale. You'll need to go in with the belief that the tariff issues in play today will work themselves out over time. But given the interconnectedness of global trade, that seems like a reasonable conclusion.
2. Realty Income is a slow and steady dividend payer
Like Prologis, Realty Income is the largest REIT in its niche. In this case, that niche is net lease. Realty Income's 5.6% yield is well above both the market's and the average REIT's. It also happens to be toward the high end of Realty Income's yield range over the past decade, suggesting that now is a good time to buy this giant dividend stock.
Realty Income largely owns single-tenant properties across the U.S. and European markets. The tenants are responsible for most property-level costs (which is what a net lease requires of the tenant). Realty Income is heavily focused on retail assets, which tend to be easy to buy, sell, and release if needed. But it also has exposure to industrial properties and an increasing collection of "other" assets, like vineyards and casinos.
In addition to these physical assets, Realty Income has started to make debt investments and to offer its investment services to institutional investors. Basically, it has been steadily increasing the levers it has to pull as it looks to keep growing.
This is important because Realty Income is so large that it requires a lot to move the needle on the top and bottom lines. That's the bad news. The good news is that its scale and conservative culture make it a highly reliable dividend stock. On that score, the dividend has been increased annually for three decades and counting. If you don't mind collecting a lofty yield supported by an industry-leading company and slow and steady dividend growth (think low to mid-single digits), you might want to buy Realty Income today.
3. Simon Property Group is economically sensitive, but always gets back on the dividend track
Simon Property Group owns enclosed malls and factory outlet centers. Although most of its assets are in the U.S. market, it has a material number of factory outlet centers that are located overseas. Its portfolio tends to be focused on high-performing retail properties that have leading positions in the regions they service. People like to shop, and Simon gives them a way to do that. The dividend yield is a lofty 5.2%.
There's an important caveat here, however. Simon Property Group has a history of cutting its dividend. It did so during the coronavirus pandemic's height and during the Great Recession, both periods of time when the consumer urge to visit a shopping mall waned. Expect cuts like these to happen again, but you should also expect the dividend to get right back on the growth track. That's what happened after the last two dividend cuts, since people tend to get back to shopping as quickly as they can when economic conditions improve.
Probably the most important reason to like Simon is its focus on high-quality properties. Essentially, its malls are a big draw for consumers, which makes them a big draw for tenants, too. As lower-quality malls get shuttered, high-quality malls will become more and more attractive. If you can handle a little cyclicality, high-yield Simon has proven a very rewarding dividend stock over the long term.
Three giant dividend-paying REITs that cover a broad spectrum
It isn't likely that investors will like all three of these REITs. However, they are each likely to be appealing to at least some investors on their own unique merits. Prologis is an out-of-favor landlord with a strong dividend growth record. Realty Income is a slow and steady tortoise, for those who like reliable dividends. And Simon is a high-quality retail landlord with a cyclical business that is increasingly differentiated from the pack.
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