Investors searching for high income in the lead-up to 2026 are being pointed to two real estate investment trusts that currently deliver unusually large yields. Innovative Industrial Properties Inc and Arbor Realty Trust each post dividend yields above 16% and, despite payout ratios that appear elevated on face-value accounting, both companies exhibit dividend characteristics that drew WarrenAI's attention.
Below is a closer look at the two REITs highlighted for their combination of high current income and notable dividend metrics.
Innovative Industrial Properties Inc (NYSE:IIPR)
The cannabis-focused REIT leads the pair with a reported dividend yield of 16.6% and a track record of making dividend payments for nine consecutive years. Over the past five years the company has produced a compound annual dividend growth rate of 13.7%, a pace WarrenAI underscores as evidence of management's ability to increase distributions over time.
IIPR's dividend coverage ratio is listed at 0.9x. Its payout ratio is shown as 173.6%, a level that reflects standard REIT accounting practices where depreciation reduces net income but does not directly affect cash available for dividends. Analyst price targets referenced in the analysis imply a potential 43.5% upside from current market levels, and WarrenAI ranks IIPR as the standout for consistent dividend growth among dividend stocks.
Arbor Realty Trust (NYSE:ABR)
Arbor Realty Trust, a mortgage REIT, reports a 16.1% dividend yield and a five-year compound annual dividend growth rate of 7.5%. Dividend coverage for ABR is shown at 1.4x, providing a wider margin relative to IIPR's coverage figure.
The company's payout ratio is noted at 165.5%, which, like IIPR's, aligns with industry norms for real estate investment trusts where depreciation frequently pushes payout ratios above conventional thresholds. Unlike IIPR, ABR does not currently have a multi-year dividend payment streak; nonetheless, WarrenAI identifies ABR as the top pick in this pair for investors prioritizing high current yield.
Context on payout and coverage
Both REITs present elevated payout ratios when those ratios are calculated using net income figures affected by depreciation. The analysis stresses that such elevated payout metrics are standard across the REIT sector and that dividend coverage ratios and multi-year histories provide additional, important context for assessing sustainability.
The combination of double-digit yields, positive dividend-growth metrics and coverage ratios above typical thresholds is cited as the rationale for singling out these two stocks as noteworthy options in the dividend stock universe for 2026.
Additional note on screening and selection tools
WarrenAI's selections are described alongside capabilities of ProPicks AI, which evaluates thousands of companies monthly across more than 100 financial metrics to generate stock ideas based on fundamentals, momentum and valuation. The ProPicks AI commentary within the same analysis references prior notable winners identified by the tool, naming Super Micro Computer (+185%) and AppLovin (+157%) as examples of past performance in its signals.
Investors weighing these two REITs should consider the high current yields, the distinctions in dividend coverage and growth histories, and the implications of REIT accounting when assessing the financial statements and sustainability of payouts.