By Ian Salisbury

When it comes to hunting for dividends, real estate is one of the few corners of the stock market that still offers solid yields.

These aren't easy times for investors looking to pocket dividend checks. The S&P 500's dividend yield is just 1.2%, one of its lowest levels on record. Energy stocks, which had been one of the market's most reliable sources for generous payouts, have seen average yields shrink to just 2.5% from 3.3% at the start of year, thanks to the past month's huge run up in energy prices.

One place investors can still find reliable payouts is real estate investment trusts. The State Street Real Estate Select Sector SPDR currently boasts a yield of 3.5%. That's by far the highest among the 11 sector funds that make up the S&P 500 index. The next closest are consumer staples and utilities, which both yield 2.6%.

Of course, one reason those payouts are generous is that real estate stock prices have lagged behind the rest of the market in recent years, thanks in part to elevated interest rates that have snarled residential and commercial property markets. Over the past 12 months, REITs are down 1.9%, on average, while the S&P 500 has returned 14.6%.

To find REITs that deliver both attractive yields and solid overall returns, we screened for real estate stocks with yields that beat those of 10-year Treasuries, currently 4.3%.

We found just four stocks. The top name, in terms of both total return and yield was commercial real estate company Realty Income, which boasts a 5.2% yield and has delivered a total return of 14% in the past 12 months, according to FactSet.

Realty Income's portfolio includes about 15,500 properties in 10 countries. The U.S. represents just over 80% of its rent base, but it has been expanding in Europe, where the U.K. accounts for about 14%, and Continental Europe just under 5%. Top clients include 7-Eleven, Dollar General, and Walgreens, as well as U.K. chains like Asda and Sainsbury's.

The payout looks solid. Analysts forecast funds from operations of $4.46 for 2026, while the dividend is projected to cost just $3.30, leading to a coverage ratio of just 74%, comfortably below the 80% to 90% range that sometimes signals stress. Wall Street analysts forecast funds from operations growth of about 3% in both 2026 and 2027.

Other companies on the list include a number of shopping center operators: Simon Property Group, which yields 4.9%; Kimco Realty, with a 4.7% yield, and Federal Realty Investment, with 4.4% yield.

Simon Property's CEO David Simon died earlier this month, following a 2024 cancer diagnosis.

Write to Ian Salisbury at ian.salisbury@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

March 31, 2026 02:00 ET (06:00 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.