W.P. Carey Announces Dividend Rise: Is the Hike Sustainable?

W.P. Carey WPC recently announced a 1.1% hike in its dividend. WPC will now pay a quarterly cash dividend of 91 cents per share, up from 90 cents paid in the prior quarter. The increased amount will be paid out on Oct. 15 to shareholders on record as of Sept. 30, 2025. Based on the increased rate, the annual dividend comes to $3.64 a share, resulting in an annualized yield of 5.4%, considering WPC’s closing price of $67.45 on Sept. 18.

Solid dividend payouts are arguably the biggest enticement for investment in REIT stocks. However, in December 2023, WPC reduced its dividend to 86 cents from the prior quarter's dividend payment of $1.07. The move resulted from the company’s strategic plan to exit its office assets and maintain a lower payout ratio. Thereafter, it maintained a disciplined capital distribution strategy and started increasing gradually, which is encouraging. Check out W.P. Carey’s dividend history here.

WPC’s Dividend Payout: Sustainable or Not?

W.P. Carey has one of the largest portfolios of single-tenant net lease commercial real estate in the United States, and Northern and Western Europe. The company invests in assets that are mission-critical for its tenants’ operations. As such, due to the inherent nature of its portfolio, the REIT enjoys higher occupancy, which stood at 98.2% as of June 30, 2025 and generates better risk-adjusted returns.

Moreover, W.P. Carey’s portfolio is well-diversified by tenant, industry, property type and geography, aiding steady revenue generation. As of June 30, 2025, its top 10 tenants constitute 19.4% of annualized base rent (ABR). The existence of long-term net leases with built-in rent escalations yields stable cash flows. As of June 30, 2025, its portfolio has a weighted average lease term of 12.1 years. More than 99% of ABR comes from leases with contractual rent increases, with 50% linked to the consumer price index. The company witnessed contractual same-store rent growth of 2.3% in the second quarter of 2025.

W.P. Carey has a healthy balance sheet position with ample liquidity. As of June 30, 2025, the company had a total liquidity of $1.7 billion, including around $1.3 billion of available capacity under its senior unsecured credit facility. The company’s share of pro rata net debt to adjusted EBITDA was 5.8X. WPC also enjoys investment-grade ratings of BBB+ from S&P Global Ratings and Baa1 from Moody’s, rendering it favorable access to the debt market.

Hence, with solid fundamentals and earnings performance, we expect the latest dividend rate to be sustainable in the long run. Shares of this Zacks Rank #2 (Buy) company have gained 9.5% over the past six months against the industry’s decline of 0.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other REITs That Recently Announced Dividend Increases

On Sept. 4, VICI Properties Inc. VICI announced a 4% hike in its quarterly cash dividend to 45 cents per share from 43.25 cents paid out in the prior quarter. The increased dividend will be paid out on Oct. 9 to stockholders of record as of the close of business on Sept. 18, 2025. The latest dividend rate of VICI Properties marks an annualized amount of $1.80 per share compared with the prior rate of $1.73. VICI Properties currently has a Zacks Rank #2.

On Sept. 9, Realty Income Corporation O, branded as “The Monthly Dividend Company,” announced another dividend boost, raising its monthly payout to 26.95 cents per share from 26.90 cents. While modest, it represents Realty Income’s 132nd increase since its 1994 NYSE debut. Payable on Oct. 15 to holders on record as of Oct. 1, the hike equates to an annualized dividend of $3.234 compared with the prior annualized dividend amount of $3.228 per share. Realty Income presently carries a Zacks Rank #3 (Hold).

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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