My search for an alternative to owning and managing a commercial property led me to real estate investment trusts—REITs.
At first I did not understand every detail of the structure. What caught my attention was the possibility of receiving income linked to property without finding tenants or managing a building myself.
That is how I discovered Realty Income.
The appeal of monthly dividends
Realty Income is a publicly traded U.S. REIT that collects rent from a broad property portfolio and pays shareholders a monthly dividend.
Unlike owning a single shop, an investment in a diversified REIT can spread tenant and property exposure across many locations. Vacancy and tenant-default risk still exist; they are simply not concentrated in one storefront.
As a listed security, it also lets me buy or sell part of my position. Stock prices, trading liquidity, and foreign-exchange rates introduce other risks, but the ability to adjust position size and convert some holdings to cash was an advantage over directly selling commercial property.
At the time, the dividend yield I expected from Realty Income looked more appealing than the net rental returns I had calculated for the properties I examined. I began investing and have continued holding shares for several years.
I have tried to buy when prices seemed sufficiently low. Some purchases have reduced my sense of downside risk, but a price I consider a bottom may not be the actual bottom.
Companies that have raised dividends for decades
After discovering the appeal of regular dividends, I started exploring other dividend-paying stocks.
Initially I focused on current dividend yield. Then I encountered dividend aristocrats and dividend kings.
The S&P 500 Dividend Aristocrats index generally selects members of the S&P 500 that have increased dividends for at least 25 consecutive years. Dividend kings are commonly described as companies with 50 or more consecutive annual dividend increases. The two groups do not have identical selection requirements.
What struck me was not merely paying a dividend for decades, but increasing that dividend for decades.
Those companies would have lived through recessions, interest-rate cycles, and inflation. Their histories seemed worth studying, even though past increases cannot guarantee future payments.
PepsiCo and more than half a century of increases
PepsiCo (NASDAQ: PEP) became one of the companies I followed.
PepsiCo sells beverages such as Pepsi and Gatorade and foods such as Lay's and Doritos. It belongs to the consumer staples sector. That does not make it immune to economic conditions, but selling food and drinks is a different business model from collecting commercial rent.
As of 2026, PepsiCo had increased its annual dividend for 54 consecutive years. The company announced an increase in its annualized dividend to $5.92 per share in 2026.
PepsiCo's 2026 dividend announcement
That history made me think not just about today's yield, but about what a future dividend stream might look like.
A large current yield means less if it cannot be sustained. A somewhat lower yield might become more meaningful over many years if the company keeps growing its dividend.
Diversifying as interest rates change
As interest rates rose and the possibility of further increases became a concern, I reduced part of my Realty Income position and allocated some of it to PepsiCo.
It was not because I concluded Realty Income was a poor business. A property-focused REIT and a company selling food and beverages face different sources of risk.
Higher rates can put pressure on a REIT's borrowing costs and property valuations. Yet consumer staples businesses also face input inflation, weaker demand, competition, and rate sensitivity.
I would not claim PepsiCo is always safer than Realty Income. I simply wanted to rely a little less on one industry and one cash-flow model.
A selloff in an otherwise strong dividend-paying business might also create a long-term opportunity. But a cheaper share price is not automatically attractive: I still need to distinguish market sentiment from deterioration in the company's capacity to pay.
From today's yield to durable cash flow
When I first started investing, current dividend yield was what I noticed first.
Now I want to ask whether a dividend can be maintained, whether it can grow, and what the investment produces in total when price changes are included.
That is how my interest expanded from Realty Income to PepsiCo.
My question changed from “How much does it pay now?” to “How long can that cash flow last, and can it grow?”
I will not always get the answers right. That is one reason I want to record what I bought and why I thought the timing made sense.