This Company Raised Its Dividend Payout for 56 Consecutive Years, But Does That Make It a Good Investment?
Dividend stocks can be an excellent source of passive income. One thing investors like to see when investing in these stocks is a company that consistently raises its Dividend payout. An ever-increasing dividend payment can be a good sign of a steady business and strong capital management. However, these dividend payments could be covering up an ugly truth: subpar investment performance.
Federal Realty Investment Trust (NYSE: FRT) is a real estate investment trust (REIT) that has raised its dividend payment for 56 consecutive years. While it has been a reliable dividend stock, it has dramatically underperformed the S 500, especially in recent years. Before buying a stock because of its lengthy dividend payout, here's what we can learn from Federal Realty.
Federal Realty is a REIT, which means it is legally required to pay out 90% of its taxable income to shareholders in the form of dividends, which is why income investors love investing in these kinds of stocks. These stocks tend to have above-average dividend yields and can be an excellent source of passive income from real estate without huge upfront investments.
Source Fool.com
