Crush Your Savings with These 3 High-Yield REITs Offering 5.6%+ Returns
A Trio of High-Yielding REITs to Consider in Your Portfolio
Realty investment trusts (REITs) are a fascinating class of investments that offer a historically attractive yield. As the REIT sector has matured, several companies have started to stand out and grow. Among these high-yield, industry-leading REITs are Prologis, Realty Income, and Simon Property Group. In this article, we will delve into each of these companies’ unique characteristics, dividend yields, and growth prospects.
1. Out-of-Favor Prologis: A Historically Attractive Yield
Prologis is the largest industrial REIT, with a global portfolio of warehouses located in most of the vital distribution hubs of the world. The company’s yield, at 3.8%, may seem relatively low compared to other high-yielding stocks on this list; however, it is well above the S&P 500 index’s 1.3% yield and near the high end of its yield range over the past decade. Prologis’ dividend growth has been impressive, with an average annualized increase of over 10% over the past decade.
Prologis’ yield is attractive given the relatively rapid pace of dividend growth it has achieved. The company’s adjusted funds from operations grew 10% year over year in the first quarter of 2025. If you don’t mind buying while other investors are selling, Prologis may be a giant industrial REIT that looks like it’s on sale.
However, there is a caveat: investors need to believe that tariff issues will work themselves out over time. The interconnectedness of global trade suggests that this is a reasonable conclusion, given the company’s continued performance and growth prospects.
2. Realty Income: A Slow and Steady Dividend Payer
Like Prologis, Realty Income is the largest REIT in its niche – net lease. Realty Income’s 5.6% yield is well above both the market’s and the average REIT’s yields. It also happens to be toward the high end of Realty Income’s yield range over the past decade.
Realty Income largely owns single-tenant properties across the U.S. and European markets, with tenants responsible for most property-level costs (which is what a net lease requires). The company has an increasing collection of "other" assets, such as vineyards and casinos, in addition to its physical assets.
In recent years, Realty Income has started making debt investments and offering investment services to institutional investors. This is important because the company’s scale requires significant growth to move the needle on both the top and bottom lines. However, its conservative culture and large size make it a highly reliable dividend stock.
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), Realty Income may be worth considering.
3. Simon Property Group: Economically Sensitive, but Always Gets Back on the Dividend Track
Simon Property Group owns enclosed malls and factory outlet centers, with most of its assets in the U.S. market. However, it has a material number of factory outlet centers located overseas. The company’s portfolio tends to focus on high-performing retail properties that have leading positions in the regions they serve.
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: Simon has a history of cutting its dividend during periods of economic uncertainty.
However, you should also expect the dividend to get right back on the growth track when economic conditions improve. This happened after the last two dividend cuts since people tend to get back to shopping quickly 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 and tenants alike.
If you can handle a little cyclicality, high-yield Simon has proven to be a very rewarding dividend stock over the long term. Each of these companies offers unique characteristics that may make them appealing to certain investors. 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 Property Group is a high-quality retail landlord with a cyclical business that’s increasingly differentiated from the pack.
Conclusion
Investing in REITs can be a rewarding experience for investors looking to diversify their portfolios. With their ability to pass income on to investors and offer historically attractive yields, these companies are worth considering. Prologis, Realty Income, and Simon Property Group each have unique characteristics that may make them appealing to certain investors.
If you’re considering investing in REITs, it’s essential to do your research and understand the pros and cons of each company. By diversifying your portfolio with a mix of high-yielding stocks like these three companies, you can create a stable income stream and potentially achieve long-term growth.
