There are no guarantees on Wall Street, and even reliable dividend stocks can end up cutting their payouts. For example, W.P. Carey, on the cusp of what would have been its 25th consecutive annual increase, instead had to reset its dividend lower at the start of 2024. But there are some dividend payers that stand out for the reliability of the passive income they produce. If you are looking to collect dividends for decades, you’ll want to examine Federal Realty (NYSE: FRT), Toronto-Dominion Bank (NYSE: TD), and Bank of Nova Scotia (NYSE: BNS) right now.
To get the big number out first, real estate investment trust (REIT) Federal Realty has increased its dividend annually for 57 consecutive years. Management believes that’s the longest streak of any REIT, and it puts the company into the elite group known as Dividend Kings. To earn and maintain entry into that club, a company must have an active streak of 50 or more annual payout increases — something that few have accomplished. There are no signs that Federal Realty is about to let its incredible streak come to an end.
The REIT focuses on strip malls and mixed-use assets. The majority of its properties contain grocery stores, which draw traffic to its retail centers. None of this is unique. What sets Federal Realty apart among REITs is the modest size of its portfolio, which usually sits at around 100 properties. Unlike some of its peers that simply try to grow as large as possible, Federal Realty is looking to own only the best assets in the best locations with a quality-over-size mentality. That’s worked out well for its investors. Add in a dividend that at the current share price yields a well-above-market-average 4.3%, and it’s easy to see why income investors will like the stock.
Toronto-Dominion can’t claim to be a Dividend King, but it has paid dividends every year since 1857. Another not-so-minor fact here is that TD Bank, as it is more commonly known, maintained its dividend through the Great Recession, a period of time during which many of the largest U.S. banks cut their dividends. And right now the dividend yield of this giant Canadian bank is a historically attractive 5.1%.
That said, there is a risk/reward trade-off to consider. TD Bank recently got in trouble with U.S. regulators because criminals were able to use its U.S. banking operations to launder money. TD Bank was hit with a large fine, and is now investing in efforts to improve its internal controls. It’s also under an asset cap in the United States: It won’t be able to increase its U.S. assets until it proves to regulators that it has fully addressed the failures that allowed that money laundering to take place. Since there’s not much growth to be had in its Canadian home market, the bank had expected to rely on the U.S. market for growth. In response to all of this, the market bid the stock down. That’s understandable for traders with short-term mindsets, but if you’re making investments with decades in mind, well, this is a buying opportunity.
