Key Points

• Nucor is an out-of-favor steelmaking giant.

• High-yield Federal Realty is the only REIT that is a Dividend King.

• Enterprise Products Partners is a high-yield midstream bellwether with a great distribution record.

• 10 stocks we like better than Enterprise Products Partners ›

If you are looking to invest some money today and have a holding period that is 10 years or more, you're going to want to pick from an elite group of companies. You want industry-leading monsters that have something unique about them that will keep them ahead of the pack. Nucor (NYSE: NUE), Federal Realty Investment Trust (NYSE: FRT), and Enterprise Products Partners (NYSE: EPD) all fit the bill. Here's why.

1. Nucor is a giant U.S. steelmaker

Steel is a cyclical industry that is a bit out of favor today. That's left U.S. steelmaking giant Nucor's stock down about 30% from its 2023 highs. Don't let that deep downturn worry you, it is actually pretty normal for a steel company. In fact, the best time to buy a cyclical business can often be when Wall Street has placed it in the dog house.

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What sets Nucor apart from its peers is its status as a Dividend King. Despite the inherent swings in the industry, this company has managed to continue to increase its dividend through thick and thin. Helping that along is a boring and reliable playbook focusing on continually investing in the business. That has notably included both the production of bulk steel and the expansion of the portfolio into higher-margin steel products.

Some investors will buy Nucor to play the steel cycle. But this is the type of company that you might want to buy and sock away for 10 years or more. Although the dividend yield is a bit miserly at 1.7%, this stock is really about getting exposure to a reliable and growing steel business.

Image source: Getty Images.

2. Federal Realty is the only one of its kind

Sticking with the Dividend King theme, real estate investment trust (REIT) Federal Realty has also increased its dividend annually for more than five decades. It is the only REIT to have achieved that feat, making it an industry standout even though it is actually a fairly small business.

Don't let the company's modest portfolio of about 100 properties fool you. It happens to own some of the most desirable strip malls and mixed-use developments in the markets where it operates. It is the focus on quality over quantity that has resulted in Federal Realty's strong track record.

That said, the REIT is a very active portfolio manager. So it is always buying and selling assets, redeveloping new acquisitions to increase the value so they can be sold down the road at a premium price. Federal Realty won't excite you, but you can be sure that the attractive 4.6% dividend yield is backed by an incredibly reliable business.

3. Enterprise Products Partners is an industry leader

Enterprise Products Partners is one of the largest midstream businesses in North America. Its portfolio of pipelines, storage, processing, and transportation assets is vital to the world's energy markets. And it largely charges fees for the use of its assets, which makes the cash flows it generates highly reliable regardless of the price of the commodities moving through its system.

This is the big-picture story that supports the master limited partnership's (MLP's) huge 6.9% yield. The slow and steady growth the business has achieved over time, meanwhile, is what has supported Enterprise's streak of 26 consecutive annual distribution hikes. That's not enough to make it a Dividend King, like Nucor and Federal Realty, but Enterprise hasn't been around for 50 years, either. It has been around for a little over a quarter of a century, having gone public in 1998. Which means the distribution has been increased on the regular from day one.

Three monster options from three different sectors

Nucor, Federal Realty, and Enterprise are vastly different businesses, but each one is a monster in its own way. And each one has an incredible dividend track record. If you are looking for stocks to buy and hold, this trio would be a good place to start today.

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Reuben Gregg Brewer has positions in Federal Realty Investment Trust and Nucor. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.

Key Points

• Federal Realty Investment Trust has increased its dividend for 57 straight years.

• EPR Properties expects to grow its monthly dividend at a 3% to 4% annual rate.

• Sun Communities recently hiked its payout by more than 10%.

• These 10 stocks could mint the next wave of millionaires ›

Investing money in high-yielding dividend stocks is a super-easy way to generate passive income. You just buy the stocks and watch the dividend income flow into your account.

For example, investing $22,000 across the following three dividend stocks could net you over $1,000 of dividend income each year:

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Data sources: Google Finance and author's calculations.

These real estate investment trusts (REITs) all generate stable and growing rental income to support their high-yielding dividends. Here's a closer look at these high-quality, high-yielding dividend stocks.

Image source: Getty Images.

Federal Realty Investment Trust

Federal Realty Investment Trust is a REIT focused on owning high-quality retail properties. The company has always prioritized quality over quantity when investing in retail properties. It currently owns 103 properties across nine strategically selected metro markets, primarily major gateway cities. The REIT invests in the first-ring suburbs of these markets because those areas benefit from the best demographics, given their highly dense populations of high-income earners. Space in those properties tends to remain in high demand by retailers, keeping occupancy high and driving steady rent growth.

It routinely upgrades its portfolio by selling lower-quality properties and recycling that capital to acquire higher-quality locations. Federal Realty will also invest money to improve its existing locations, including adding residential and other properties to its retail centers to draw more traffic to its retail tenants.

The REIT's focused and high-quality real estate portfolio has produced durable and growing income. That has enabled Federal Realty Investment Trust to raise its payment for 57 straight years, the longest record in the REIT industry.

EPR Properties

EPR Properties is a REIT focused on owning experiential real estate, including movie theaters, eat-and-play venues, and attractions. It leases these properties to operating tenants, primarily under triple net (NNN) terms. NNN leases generate stable rental income because tenants cover all property operating costs, including routine maintenance, real estate taxes, and building insurance. That stable income enables EPR Properties to pay a monthly dividend.

The REIT generates meaningful excess free cash flow after paying its high-yielding dividend. It reinvests those funds to grow its portfolio. EPR Properties buys experiential real estate in sale-leaseback transactions and invests in build-to-suit development and redevelopment projects. At its current annual investment rate of $200 million to $300 million, EPR can grow its cash flow per share and dividend at a 3% to 4% annual rate.

Sun Communities

Sun Communities is a REIT that invests in manufactured home communities and RV resorts. Those properties produce pretty durable income. It's expensive to move a manufactured home, which keeps occupancy high. Lot tenants typically sell their home to a new tenant rather than moving the house. Meanwhile, demand for space in RV parks is strong and growing, with limited new supply.

The company's properties are so durable that Sun Communities has delivered more than 20 years of positive annual net operating income (NOI) growth. For comparison, multifamily REITs have experienced three periods of declining NOI during that timeframe, because of recessions. Sun has also grown its NOI faster than other REITs, with 5.3% compound annual growth since 2000, compared with 3.2% for the industry as a whole. In addition to steady income growth at its existing locations, the REIT routinely acquires new properties and invests in expanding and redeveloping its existing ones.

Sun Communities' stable and steadily rising income enables it to pay a resilient and growing dividend. It recently raised its dividend payment by 10.6%.

Great ways to generate passive income

Federal Realty Investment Trust, ERP Properties, and Sun Communities pay attractive and growing dividends. That makes them great options for investors seeking to generate passive income. They should provide investors with durable and growing dividend income for years to come.

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Matt DiLallo has positions in EPR Properties and Sun Communities. The Motley Fool has positions in and recommends EPR Properties. The Motley Fool recommends Sun Communities. The Motley Fool has a disclosure policy.

Federal Realty (NYSE: FRT) is not the largest real estate investment trust (REIT) you can buy. It isn't even the largest REIT in its strip mall niche. It actually has a fairly small collection of properties in its portfolio. And yet it stands head and shoulders above every other REIT when it comes to its dividend. Here's why now is a good time to consider adding Federal Realty and its industry-leading business to your portfolio.

What does Federal Realty do?

Federal Realty owns strip malls and mixed-use properties, which generally include apartments and offices in the mix with retail. Some of the REIT's individual properties are quite large developments with multiyear projects on them. Others are simple strip malls where locals go to meet their everyday needs, like buying groceries or getting a haircut.

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Image source: Getty Images.

From this perspective, Federal Realty isn't particularly differentiated from its competitors. That changes when you see that it only owns around 100 properties, which is generally a much smaller portfolio than its closest peers. However, those properties are particularly well located, with Federal Realty's assets having a higher average income around them and higher average population density. In other words, its portfolio is focused in wealthy areas with lots of residents nearby, which is exactly where retailers want to be located.

The strength of Federal Realty's portfolio today is highlighted by its occupancy rates. After dipping during the coronavirus pandemic, they are now back above that level and closing in on 20-year highs. Occupancy ended the first quarter of 2025 at 93.6% but is expected to close in on 95% as the year progresses. Even during the pandemic, when non-essential businesses were closed by the government in an attempt to slow the spread of COVID-19, Federal Realty's occupancy didn't fall below 89%.

FRT Dividend data by YCharts

The real story, however, is Federal Realty's dividend, which has been increased annually for 57 consecutive years. That makes the REIT a Dividend King, which alone is an impressive feat. But there's two more nuances here. First, Federal Realty has the longest dividend streak of any REIT. Second, it is the only REIT that is a Dividend King. Having a small, well-positioned portfolio has clearly paid off.

Federal Realty's strength is in development and redevelopment

Federal Realty didn't just buy 100 or so properties 57 years ago and sit on them for half a century. It is actually a quite active buyer and seller of assets. The key to its long-term success is what it does with the assets it buys.

Usually Federal Realty buys well-located properties that need a little love and attention. That could be as simple as a coat of paint and more focus on tenant quality. A refresh of a property's exterior to make it look up to date goes a long way in attracting customers and tenants. But often the capital investments being made are far more extensive.

Federal Realty will usually add to the properties it buys in some way. That can include adding apartments and offices above street-level retail space. It can involve tearing down an entire property and rebuilding it from scratch. Or it can be as simple as getting the permitting to make changes, which alone adds value to a property. When Federal Realty believes that it can sell a property for an attractive price, it will do so and then go on the hunt for another property that it can work on to improve its value over time.

In other words, Federal Realty's portfolio is in a near-constant state of flux. And the inherent push is for the improvement in the quality of its portfolio. Management knows from experience that well maintained and located properties attract tenants, customers, and buyers, and that is the REIT's guiding star.

A great REIT with an attractive yield

Given the quality of Federal Realty's business model, highlighted by its Dividend King status, the shares don't go on sale very often. Today the dividend yield is 4.6%, which is notably higher than the S&P 500 index's (SNPINDEX: ^GSPC) 1.3% and the average REIT's 4.1%. Federal Realty's yield is also near the high side of the range over the past decade. If you are looking for a reliable dividend backed by a high-performing business, Federal Realty should probably be on your short list today.

Should you invest $1,000 in Federal Realty Investment Trust right now?

Before you buy stock in Federal Realty Investment Trust, consider this:

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Reuben Gregg Brewer has positions in Federal Realty Investment Trust. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.