One of The S&P 500's Top-Yielding Dividend Stocks Just Hiked Its Payout Again

For income-minded investors, higher dividend yields are obviously more attractive than lower-yielding dividend stocks. The size of the percentage yield is only half of the matter, however. Just as important to anyone planning on sticking with an income-generating holding for the long haul is how reliably its dividend holding is going to grow over time.

With that as the backdrop, there's one S&P 500 (SNPINDEX: ^GSPC) name that brings both to the table. It recently raised its dividend again, in fact, extending a streak that's now been in place for 29 years. That company is Realty Income (NYSE: O), which you can plug into here at a forward-looking dividend yield of 6%.

Realty Income is built to be resilient

You may be more familiar with Realty Income than you realize. It doesn't do any consumer-facing business under its own name. Rather, it's a landlord specifically to the brick-and-mortar retailing industry. The real estate investment trust -- or REIT -- boasts a portfolio of around 15,500 properties, and companies like Dollar General, Tractor Supply, Home Depot, and 7-Eleven are among its top tenants. Although the brick-and-mortar retail business as a whole may be facing headwinds, this REIT's occupancy rate, consistently above 98% (closer to 99%, actually), confirms it's serving the more resilient sliver of the industry.

Image source: Getty Images.

That's not the important detail to interested income investors, however. Far more compelling is the fact that in September, Realty Income raised its monthly -- yes, monthly -- dividend payment for the 116th quarter in a row. That's 29 consecutive years' worth of four quarterly dividend hikes.

And not pittance increases either. Although its more recent dividend growth has been somewhat stymied by a combination of higher interest rates and a lethargic economy, since these payments began back in 1995, they've grown at an inflation-beating yearly rate of 4.1%.

One of the best (at what it's meant to do)

Past performance is no guarantee of future results, of course. But past performance is a pretty good indication of what the future likely holds. That's particularly true when the key drivers of that historical growth are still in place. And that's certainly the case here.

That being said, to the extent retailing may remain on the defensive, Realty Income is also easing its way to the data center business. Like retailing, this industry's rent-based remote access to servers lends itself to the tax advantages that REITs enjoy. Namely, any rent-based profits that are passed along to investors in the form of dividends aren't first taxed at the corporate level. This ultimately means more of Realty Income's net earnings make their way into shareholders' pockets.

Just bear in mind that while O shares can achieve some price appreciation, they don't consistently do so, as they're often impacted by ever-changing interest rate backdrops. This ticker should first and foremost be viewed as an income and income-growth holding, albeit one of the S&P 500's very best.

James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Dollar General, Home Depot, Realty Income, and Tractor Supply. The Motley Fool recommends the following options: short October 2026 $35 calls on Tractor Supply. The Motley Fool has a disclosure policy.