Dividend yield percentages can be deceiving. Nvidia raised its dividend 150% last year, which sounds incredible until you realize the yield was so low to begin with that it barely moves the needle for income investors.
Here’s the reality: if you need actual income from your portfolio, you need stocks that already offer meaningful yields and grow those payouts consistently over time. The S&P 500 yields 1.14% on average. That’s not cutting it for anyone trying to generate real cash flow.
We looked for companies offering yields of at least 3% that also have track records of growing their dividends faster than inflation. What we found: three stocks yielding between 3.9% and 5.75% that have been raising payouts for decades.
Here’s what makes them interesting.
Essex Property Trust (ESS) – 3.9% Yield
Market cap: $18 billion | Dividend track record: 31 years of increases
Essex Property Trust is a West Coast residential REIT that owns and manages 257 apartment communities, primarily in California. The current yield of 3.9% is more than triple the S&P 500 average.
As a REIT, Essex is required to pay out 90% of its taxable income as dividends. That structure creates a direct link between earnings growth and dividend increases. Over the last decade, the company has nearly doubled its dividend. The 2025 increase came in at 4.9%, comfortably ahead of inflation.
The dividend growth hasn’t been explosive, but it doesn’t need to be. When you’re starting from a 3.9% yield and growing 4-5% annually, the compounding effect on income is significant. Add in year-over-year earnings growth of 39% in the most recent period, and the payout looks sustainable with room to accelerate.
The risk here is geographic concentration. West Coast residential real estate has its own dynamics, and if that market weakens, Essex feels it more than a nationally diversified REIT would. But 31 consecutive years of dividend increases suggests management knows how to navigate different market environments.
Chevron (CVX) – 4.4% Yield
Market cap: $312 billion | Current yield: 4.4%
Chevron yields 4.4%, almost four times the S&P 500 average. Since 2020, the company has raised its dividend 33%, outpacing the 25% inflation over that period.
Oil and gas stocks always carry commodity price risk. When oil drops, dividends come under pressure. But Chevron has a massive $75 billion share buyback program announced in 2023 that’s still running. Share buybacks reduce the number of shares management needs to pay dividends on, which makes the payout more sustainable even if oil prices stay soft.
The company did trim its buyback plans in May responding to lower oil prices, but they’re still repurchasing billions of dollars worth of shares. That gives them flexibility on the dividend even if energy prices remain under pressure through 2026.
At a $312 billion market cap, Chevron is one of the largest energy companies in the world. They’re not going anywhere, and the 4.4% yield gives you real income while you wait for energy prices to recover. If oil rebounds, the dividend growth could accelerate significantly.
Realty Income (O) – 5.75% Yield
Market cap: $52 billion | Monthly dividend | 132 increases since 1994
Realty Income is the most compelling name on this list purely from an income perspective. The current yield of 5.75% is more than five times the S&P 500 average, and they pay monthly, not quarterly.
The company owns over $85 billion worth of commercial real estate across 15,500 properties spanning 92 different industries. That diversification is critical. They’ve raised their dividend through the dot-com crash, the 2008-2009 financial crisis, COVID-19, and everything else the market has thrown at them since 1994.
They’ve announced 132 dividend increases since 1994, often several per year. Over the last decade, cumulative dividend increases total 46%, well ahead of the 36% inflation over that period.
Recent earnings growth of 17.2% year-over-year gives them plenty of room to keep raising. The debt-to-equity ratio sits at 74%, which is healthy for a REIT. And like Chevron, they’re running a share buyback program through 2028, buying back $2 billion worth of stock.
If you’re building a dividend portfolio and need actual income today, not five years from now, Realty Income is hard to ignore. The 5.75% yield means $10,000 invested generates $575 annually in dividends. And that number keeps growing.
Why These Make Sense Now
The average S&P 500 company raised its dividend 6.4% in 2024. These three have been matching or exceeding that rate while starting from yields that are 3-5x higher than the market average.
That combination matters. Dividend growth on a 1% yield doesn’t generate meaningful income for years. Dividend growth on a 4-6% yield compounds into serious cash flow relatively quickly.
All three companies have sustainable business models, reasonable debt levels, and decades-long track records of raising payouts through multiple economic cycles. They’re not growth stocks, and they’re not going to double in a year. But if you need income and want that income to grow faster than inflation, these are the types of stocks that actually deliver.
Essex gives you residential real estate exposure with a 3.9% yield. Chevron gives you energy exposure with a 4.4% yield and commodity upside if oil rebounds. Realty Income gives you diversified commercial real estate with a 5.75% yield paid monthly.
Pick your exposure based on what you already own and where you think the economy is heading. But all three offer yields and dividend growth that put the S&P 500 average to shame.
