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High dividend yielding stocks are appealing to defensive investors in especially inflationary environments. We expect defensive stocks with high dividend yields to outperform the 10-year Treasuries over the next 10 years.

On the other hand, high dividend yields are not the only important criteria to be sought in defensive stocks. Defensive investors also look for long records of dividend payments in each high dividend yielding stock. We think the stocks that are able to increase dividends are attractive options for conservative investors that demand consistency and some inflation protection.

We compiled a list of U.S. financial stocks that achieved consistent dividend growth and paid high current dividend yield. The market data are sourced from Fidelity. All companies in this list increased their dividend payments every year since 2005. These stocks have market capitalization above $1 billion and 12-month dividend yield of at least 3%.

Dividend Yield

5-Year Average Div. Growth

52-Week Return

Omega Healthcare Investors Inc.

OHI

7.65%

9.63%

2.22%

Senior Housing Properties Trust

SNH

6.49%

2.95%

13.81%

Mercury General Corp.

MCY

6.08%

4.56%

-3.26%

W.P.Carey & Co.

WPC

5.60%

2.52%

36.91%

Cincinati financial Corporation

CINF

5.54%

3.61%

8.78%

HCP Inc.

HCP

5.31%

2.46%

12.09%

Corporate Office Properties Trust

OFC

5.27%

8.06%

-15.98%

People's United financial Inc.

PBCT

4.88%

5.76%

-3.94%

Tanger Factory Outlet Centers Inc.

SKT

4.57%

3.30%

27.85%

Digital Reality Trust

DLR

3.92%

20.74%

3.57%

PartnerRe Ltd.

PRE

3.43%

7.12%

-0.40%

Cullen/Frost Bankers Inc.

CFR

3.33%

6.23%

7.69%

Federal Reality Investment Trust

FRT

3.25%

3.84%

13.28%

Essex Propert Trust Inc.

ESS

3.11%

4.36%

29.53%

Erie Indemnity Company

ERIE

3.03%

7.42%

52.84%

AVERAGE

6.17%

12.33%

Since 2005, these 15 U.S. financial stocks have increased their cash dividends every year and their five year average dividend growth is 6.17% on average. In the last 52-week period, the average return of these 15 stocks was 12.33%. Only four stocks – MCY, OFC, PBCT and PRE – in this group had a loss in the past 12 months, whereas seven stocks – SNH, WPC, HCP, SKT, FRT, ESS and ERIE – provided double digit returns in the same period.

The top 10 highest dividend yielding financials with consistent dividend growth are as follows:

1. Omega Healthcare Investors Inc. ((NYSE:OHI)): Omega Healthcare Investors Inc. is a real estate investment trust specialized in healthcare facilities. OHI has a high dividend yield of 7.65% and returned 2.22% during the past 12 months. In the past 5 years, OHI increased its dividend payments 9.63% on average. The stock has a market cap of $1.97B and P/E ratio of 92.10. David Dreman's Dreman Value Management had nearly $40 Million in OHI. Jim Simons and Cliff Asness are also among OHI investors.

2. Senior Housing Properties Trust ((NYSE:SNH)): Senior Housing Properties Trust is a real estate investment trust specialized in nursing homes and senior apartments. SNH has a 6.49% dividend yield and returned 13.81% during the past 12 months. In the past 5 years, SNH increased its dividend payments 2.95% on average. The stock has a market cap of $3.21B and P/E ratio of 25.46. Ken Fisher has the largest position in SNH among 300 plus funds we are tracking.

3. Mercury General Corp. ((NYSE:MCY)): Mercury General Corp. is a U.S. insurance company specialized in automobile and property insurance. MCY has a 6.08% dividend yield but lost 3.26% during the past 12 months. In the past 5 years, MCY increased its dividend payments 4.56% on average. The stock has a market cap of $2.16B and P/E ratio of 14.51. Jean Marie Eveillard's First Eagle, Chuck Royce's Royce & Associates and Ken Griffin's Citadel are prominent MCY investors.

4. W.P.Carey & Co. ((NYSE:WPC)): W.P.Carey & Co. is a U.S. company providing sale-leaseback financing for its clients. WPC has a 5.60% dividend yield and returned 36.91% during the past 12 months. In the past 5 years, WPC increased its dividend payments 2.52% on average. The stock has a market cap of $1.45B and P/E ratio of 17.57. Tom Gayner's Markel Gayner Asset Management and Royce's Royce & Associates hold the largest positions of WPC.

5. Cincinati financial Corporation ((NASDAQ:CINF)): Cincinati financial Corporation is a U.S. insurance company specialized in property casualty insurance. CINF has a 5.54% dividend yield and returned 8.78% during the past 12 months. In the past 5 years, CINF increased its dividend payments 3.61% on average. The stock has a market cap of $4.71B and P/E ratio of 12.71. Jean Marie Eveillard's First Eagle holds more than $350 Million of CINF. Jim Simons and Chuck Royce are also among CINF investors.

6. HCP Inc. ((NYSE:HCP)): HCP Inc. a real estate investment trust specialized in healthcare industry. HCP has a 5.31% dividend yield and returned 12.09% during the past 12 months. In the past 5 years, HCP increased its dividend payments 2.46% on average. The stock has a market cap of $14.46B and P/E ratio of 41.89. D.E. Shaw had more than $100 Million in HCP. Jim Simons, Phill Gross and Paul Tudor Jones also have HCP positions.

7. Corporate Office Properties Trust ((NYSE:OFC)): Corporate Office Properties Trust is a real estate investment trust specialized in suburban office properties. OFC has a 5.27% dividend yield but lost 15.98% during the past 12 months. In the past 5 years, OFC increased its dividend payments 8.06% on average. The stock has a market cap of $2.22B. Ken Fisher's Fisher Asset Management had $40 Million in OFC at the end of March.

8. People's United financial Inc. ((NASDAQ:PBCT)): People's United financial Inc. is the holding company of People's United Bank. PBCT has a 4.88% dividend yield but lost 3.94% during the past 12 months. In the past 5 years, PBCT increased its dividend payments 5.76% on average. The stock has a market cap of $4.62B and P/E ratio of 36.89. Ken Griffin's Citadel and Israel Englander's Millennium Management hold the two largest positions in PBCT among 300+ funds we are tracking.

9. Tanger Factory Outlet Centers Inc. ((NYSE:SKT)): Tanger Facory Outlet Centers Inc. is a real estate investment trust specialized in outlet malls industry. SKT has a 4.57% dividend yield and returned 27.85% during the past 12 months. In the past 5 years, SKT increased its dividend payments 3.30% on average. The stock has a market cap of $2.08B and P/E ratio of 61.61. Israel Englander's Millennium Management, Andrew Sandler's Sandler Capital and Ken Griffin's Citadel are prominent SKT investors.

10. Digital Reality Trust ((NYSE:DLR)): Digital Reality Trust is a real estate investment trust specialized in technology-related real estate. DLR has a 3.92% dividend yield and returned 3.57% during the past 12 months. In the past 5 years, DLR increased its dividend payments 20.74% on average. The stock has a market cap of $5.98B and P/E ratio of 75.34.

Source: 15 High Dividend Financials With Consistent Dividend Growth