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

W.P. Carey WPC recently announced a 1.1% hike to its dividend. WPC will now pay a quarterly cash dividend of 90 cents per share, up from 89 cents paid in the prior quarter. The increased amount will be paid out on July 15 to shareholders on record as of June 30, 2025. Based on the increased rate, the annual dividend comes to $3.60 a share, resulting in an annualized yield of 5.7%, considering WPC’s closing price of $63.36 on June 12.

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 can generate better risk-adjusted returns due to higher occupancy. The portfolio occupancy as of March 31, 2025, was 98.3%.

Moreover, the portfolio is well-diversified by tenant, industry, property type and geography, aiding steady revenue generation. The existence of rent escalations yields stable cash flows. More than 99% of annualized base rent comes from leases with contractual rent increases, with 49.8% linked to the consumer price index. The company witnessed contractual same-store rent growth of 2.4% in the first quarter of 2025.

W.P. Carey has a healthy balance sheet position with ample liquidity. As of March 31, 2025, the company had a total liquidity of $2.0 billion, including around $1.8 billion of available capacity under its senior unsecured credit facility and $187.8 million of cash and cash equivalents. The company’s share of pro rata net debt to adjusted EBITDA was 5.8X. Per the April business update, with the repayment of $450 million senior unsecured notes, which matured in February 2025, W.P. Carey has repaid around half of its debt set to mature through 2026. 

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 16.3% over the past three months, outperforming the industry’s growth of 4.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other REITs That Recently Announced Dividend Increases

On June 10, Realty Income Corporation O, widely known as “The Monthly Dividend Company,” has raised its monthly dividend once again — this time to 26.90 cents per share from 26.85 cents. Though marginal, the increase marks its 131st hike since its 1994 NYSE listing. Payable on July 15 to shareholders of record as of July 1, this results in an annualized dividend of $3.228 and a yield of 5.63% based on the June 10 share price of $57.35. A member of the S&P 500 Dividend Aristocrats index, the REIT boasts 30 consecutive years of dividend growth and 111 straight quarterly increases, underscoring its resilience.

On June 2, Essential Properties Realty Trust, Inc. EPRT declared a quarterly cash dividend of 30 cents per share for the second quarter of 2025, reflecting an increase of approximately 2% over the prior quarter. The dividend is payable on July 14, 2025, to stockholders of record as of the close of business on June 30, 2025.

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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