3 Brilliant Dividend Stocks to Buy Now and Hold for the Long Term

Investing in dividend stocks is a wise long-term investment strategy. According to data from Hartford Funds and Ned Davis Research, the average dividend-paying stock has outperformed nonpayers by more than 2-to-1 over the past 50 years. The best returns have come from dividend growers (10.2% average annual total return).

Prologis (NYSE: PLD), Realty Income (NYSE: O), and Mid-America Apartment Communities (NYSE: MAA) have excellent records of paying a growing dividend. With more growth likely, they're brilliant dividend stocks to buy now and hold long-term.

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The above-average growth should continue

Prologis has a strong record of growing its dividend. The leading industrial REIT has increased its payment every year for more than a decade. It has grown its payout at a 13% compound annual rate over the past five years. That's more than double the rate of the S&P 500 (SNPINDEX: ^GSPC) (5%) and other REITs (6%).

The REIT's growing dividend has helped drive 13.6% annualized total returns for its investors over the last decade. Prologis' dividend currently yields nearly 4%, putting it several times higher than the S&P 500 (less than 1.5%).

The industrial REIT should have no trouble increasing its dividend in the future. It generates stable and growing cash flow backed by long-term leases with built-in rental escalation clauses. Most of its current lease rates are well below market rents. Because of that, Prologis should be able to sign new leases at much higher rates as legacy leases expire. With demand for warehouse space expected to continue growing and supplies likely to remain constrained due to high construction costs and less available land for development, rental rates should continue to rise.

Prologis also has a fortress financial profile, which gives it significant flexibility to invest in growing its portfolio. It has a vast land bank to develop new warehouses and selectively build data centers. The REIT can also make acquisitions as accretive opportunities arise.

Built to pay a growing dividend

Realty Income's mission is to invest in places that enable it to deliver a dependable and growing monthly dividend to its investors. The diversified REIT (retail, industrial, gaming, and other properties) has certainly delivered on its mission over the years. It has increased its dividend 131 times since its public market listing in 1994, including the past 111 consecutive quarters and for 30 straight years. The landlord has grown its dividend at a 4.2% compound annual rate since going public, which has helped drive 13.6% compound annual total returns for its investors.

The REIT is in an excellent position to continue increasing its dividend, which yields over 5.5%. It has a conservative dividend payout ratio (about 75% of its very stable cash flow), which enables it to retain lots of cash to fund new income-generating real estate investments. Realty Income also has one of the 10 best balance sheets in the REIT sector.

Realty Income has a long growth runway ahead of it. The REIT estimates that there are $14 trillion of properties in its core investment areas across the U.S. and Europe. It has been steadily expanding its opportunity set by adding new investment verticals, like U.S. gaming properties ($400 billion opportunity) and U.S. data centers ($500 billion).

Cashing in on growing rental demand

Mid-America Properties is one of the largest apartment landlords in the country. It primarily focuses on owning multifamily communities across the fast-growing Sun Belt region. Population and job growth in the South are driving strong and growing demand for rental properties.

Rising demand should drive healthy rent growth across the REIT's existing portfolio. It should also support its ability to develop additional apartment projects in the future. Mid-America currently has seven development projects underway that should stabilize by the end of 2027. It expects to start three to four more projects this year and has land sites to build even more apartments in the future.

Growing rental income should enable Mid-America to continue increasing its dividend. The REIT has never suspended or reduced its dividend in its more than three decades as a public company. Meanwhile, it has grown its payout, which yields over 4%, at a 7% compound annual rate over the past 10 years, significantly exceeding the sector average. That has helped support an average annual total return of 10.8% over the last decade.

Smart buys for growing dividends

Prologis, Realty Income, and Mid-America Apartment Communities have excellent records of paying dividends. They've steadily increased their high-yielding dividends over the years, which has helped contribute to their strong total returns. With more dividend growth likely, they're brilliant stocks to buy and hold for the long haul.

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Matt DiLallo has positions in Mid-America Apartment Communities, Prologis, and Realty Income. The Motley Fool has positions in and recommends Mid-America Apartment Communities, Prologis, and Realty Income. The Motley Fool recommends the following options: long January 2026 $90 calls on Prologis. The Motley Fool has a disclosure policy.