Meet the Unstoppable Dividend Stock Crushing the S&P 500 in 2026

4 hours ago 2

Matt DiLallo, The Motley Fool

Tue, July 21, 2026 astatine 5:20 AM CDT 4 min read

The S&P 500 is up astir 9% year-to-date, putting it connected way for different twelvemonth of double-digit gains. That beardown instrumentality is simply a precocious hurdle for a dividend-paying banal to overcome. However, that's conscionable what Realty Income (NYSE: O) has done this year. The existent property concern spot (REIT) has gained implicit 16.5%, portion its dividend has driven the full instrumentality to much than 19.5%.

Here's what's driving this unstoppable dividend's stock's market-crushing full returns successful 2026.

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A idiosyncratic adjacent respective upward pointing arrows.

135 times (and counting)

Realty Income's main gully is its dividend income. The REIT pays a monthly dividend that presently yields astir 4.9% (roughly 4 times the S&P 500's 1% dividend yield). That high-yielding dividend has proven unstoppable implicit the years. Realty Income has declared 673 consecutive monthly dividends passim its history. The REIT has raised its payout 135 times since its nationalist marketplace listing successful 1994, including for the past 115 consecutive quarters, increasing it astatine a 4.1% compound yearly rate.

The superior origin driving dividend maturation is caller investments. Realty Income buys billions of dollars successful income-producing existent property each year, which grows its adjusted funds from operations (AFFO) per share. The REIT presently expects to put astir $9.5 cardinal this twelvemonth (up from $6.2 cardinal past year), which should turn its AFFO to $4.41-$4.44 per share, a 3% to 3.7% summation from past year.

Securing partners to heighten its maturation

Realty Income's unstoppable dividend isn't the main crushed it's crushing the S&P 500 this year. The superior catalyst is its advancement successful gathering a backstage superior ecosystem. This strategy volition alteration it to accelerate AFFO per stock maturation with capital-light revenue, trim its reliance connected the nationalist equity market, and grow its concern opportunities. This level presently consists of 4 vehicles:

U.S. Core Plus Fund: The REIT launched a backstage superior money to make fee-based income, enhancing returns and expanding the magnitude of superior it tin invest.
GIC strategical partnership: Realty Income formed a strategical concern with GIC. They volition signifier a associated task (JV) focused connected high-quality build-to-suit logistics improvement projects. GIC besides became a cornerstone capitalist successful the U.S. Core Plus Fund. Meanwhile, Realty Income agreed to a operation financing and take-out acquisition statement of a $200 cardinal build-to-suit concern portfolio successful Mexico (its archetypal concern successful the country).
Apollo strategical partnership: Apollo-managed funds volition put $1 cardinal into a JV that volition ain a diversified portfolio of single-tenant retail properties.
Cloud Capital associated venture: Realty Income is forming a JV with Cloud Capital to put successful hyperscale information centers.