3 Elite High-Yield Dividend Stocks Down 8% to 27% That Have Hiked Their Payouts for More than 50 Years in a Row

Some of the best dividend stocks in the world are on sale right now. Shares of Federal Realty Investment Trust (NYSE: FRT), Johnson & Johnson (NYSE: JNJ), and PepsiCo (NASDAQ: PEP) are currently down 8% to 27% from their 52-week highs. Those sell-offs have pushed their dividend yields even higher. With elite records of dividend growth -- each has delivered more than 50 years of consecutive annual payment increases -- they are very attractive investment opportunities right now.

An elite REIT

Shares of Federal Realty Investment Trust have declined nearly 20% from their 52-week high. That slump has pushed the real estate investment trust's (REIT) dividend yield up to more than 4.5%. That's over three times higher than the S&P 500's sub-1.5% dividend yield.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Image source: Getty Images.

Federal Realty has increased its dividend for 57 straight years. That's the longest record in the REIT industry. It qualifies the company for the elite group of Dividend Kings, companies with 50 or more years of increasing their dividend payments.

A big factor driving the REIT's consistent growth is its focus on quality over quantity. It has a concentrated portfolio of high-quality retail-based properties in strategically selected metro markets, primarily major cities along the coasts. It focuses on owning open-air shopping centers and mixed-use properties in first-ring suburban locations because they have a high density of high-income consumers. That makes its properties highly attractive to retailers, driving high occupancy levels and steady rent growth. Federal Realty routinely invests capital to enhance its portfolio by redeveloping existing properties or acquiring higher-quality properties, often funding these investments by selling lower-quality locations.

A very healthy dividend stock

Shares of healthcare giant Johnson & Johnson have shed more than 8% of their value from their recent peak. That has helped nudge the company's dividend yield up to nearly 3.5%. The company also increased its dividend payment by 4.8% earlier this year, extending its growth streak to 63 consecutive years.

Johnson & Johnson is arguably the healthiest high-yielding dividend stock in the world. The company has a pristine AAA credit rating, higher than the U.S. government. It backs that elite bond rating with a strong balance sheet and robust free cash flow. The company ended the first quarter with only $13.5 billion of net debt, or $38.8 billion of cash and $52.3 billion of debt. That's a small amount considering its nearly $370 billion market cap. The healthcare company also generates about $20 billion in free cash flow each year, even though it's one of the world's top investors in research and development (R&D) at over $17 billion last year. It produces more than enough cash to cover its nearly $12 billion annual dividend outlay.

The company's heavy investments in R&D and inorganic spending, totaling over $30 billion in acquisitions and other external investments over the past few quarters, should drive continued earnings growth. That puts Johnson & Johnson in a strong position to continue increasing its payout.

A satisfying stream of rising dividend income

PepsiCo's stock has gotten walloped, falling more than 27% from its 52-week high. One benefit of that sell-off is that the beverage and snacking giant's dividend yield has risen well past 4%. The company also recently hiked its payout by another 5%, extending its dividend growth streak to 53 straight years.

The company produces a lot of cash, which enables it to invest in growing its business and pay its lucrative dividend. It spends money to develop innovative products, increase manufacturing capacity, and improve productivity. PepsiCo expects these investments to drive 4% to 6% annual organic revenue growth and high single-digit annual earnings-per-share growth.

On top of that, the company has a strong balance sheet, which enables it to make strategic acquisitions to enhance its growth. PepsiCo recently closed its $1.7 billion purchase of Poppi as part of its ongoing portfolio transformation toward healthier products. The company's growth investments should give it plenty of pop to continue boosting its shareholder payout.

Top-quality income stocks

Federal Realty, Johnson & Johnson, and PepsiCo are among the dividend elite by raising their payouts for more than 50 straight years. With their share prices down and yields up, they look like very attractive investment opportunities right now. Income-focused investors can lock in a higher-yielding income stream that should continue growing in the decades ahead.

Should you invest $1,000 in Federal Realty Investment Trust right now?

Before you buy stock in Federal Realty Investment Trust, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Federal Realty Investment Trust wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $830,492!*

Now, it’s worth noting Stock Advisor’s total average return is 982% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 19, 2025

Matt DiLallo has positions in Johnson & Johnson and PepsiCo. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.