Tip#2: Dividend history.
Most of the time, the past is no prediction of the future. However, when it comes to top dividend-paying stocks, a company's dividend history can give investors hints about the future.
There's no better example of a REIT's dividend durability than Federal Realty (FRT). The Baltimore-based shopping center REIT has a record of increasing its annual dividend for 46 years in a row. Federal has a healthy development pipeline of over $1 billion that should enable the company to generate around 7% growth in 2014. Federal's share price of $101.69 is a bit pricey at 22.3 times P/FFO. But it's clear that Mr. Market sees the value in Federal's fortress balance sheet, with an S&P rating of A-, as well as its earnings reliability. But value investors should wait patiently for a better margin of safety.
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