This Dividend Stock Has Gained 18% While the Rest of its Sector Went Nowhere. Here's Why.

Over the past three months, the real estate sector hasn't exactly been a beneficiary of the overall stock market's rally to record highs. In fact, real estate has been almost exactly flat, while the S&P 500 has gained about 11% during the same period.

However, there is one unique high-dividend real estate stock that not only has outperformed its sector but has also produced a market-beating 18% gain in the past three months. Here's why investors should pay attention to it.

A unique hospitality REIT

Ryman Hospitality Properties (NYSE: RHP) is one of several hotel-owning real estate investment trusts, or REITs, in the market, but it's in a category by itself. It specializes in large-scale, high-end properties focused on group events like conferences and conventions.

Image source: Getty Images.

Specifically, Ryman owns the five Gaylord hotels as well as a large-scale Marriott property. It also has an entertainment segment that owns several iconic venues, including its namesake, the Ryman Auditorium in Nashville, and the Ole Red dining and entertainment chain, which recently announced its seventh location.

Why Ryman is outperforming

For one thing, hotel REITs aren't as sensitive to interest rate fluctuations as other types. Commercial property types like retail and industrial are leased on a long-term basis, so they have consistent cash flow. On the other hand, hotel properties "rent" their space on a nightly basis, and the business performance can change over time. So, when hotels are performing well, Ryman can be a big winner.

The group-focused nature is also a key differentiator. Large events generally book years in advance, which gives Ryman unique visibility into future revenue -- so if future bookings are strong, Ryman's stock can get a nice tailwind.

Ryman's recent results show how well the business is doing. In the first quarter, Ryman reported 13% year-over-year revenue growth, and 19% growth in adjusted funds from operations (AFFO -- the real estate equivalent of "earnings"). Most REITs are happy to see these metrics rise by mid-single-digit percentages.

In the earnings call, management noted that Ryman's margins expanded nicely, average daily room rates and out-of-room spending (on things like dining and entertainment) are both increasing, and more than 460,000 future room nights were booked. As a result, Ryman raised its full-year guidance, and its leaders have a generally optimistic outlook for the rest of 2026.

Even after its recent rally, Ryman still trades at an attractive 13 times FFO. It has a dividend yield of more than 4%, which is well-covered by the company's cash flow. With excellent momentum throughout its business, Ryman could be worth a closer look for value-seeking investors right now.

Matt Frankel, CFP has no position in any of the stocks mentioned. The Motley Fool recommends Ryman Hospitality Properties. The Motley Fool has a disclosure policy.