3 High-Yield Dividend Stocks I'm Buying to Boost My Passive Income in December

MAA +0.28% MPW -0.17% WPC -0.03%

Key Points

• Medical Properties Trust is finally healthy again.

• Mid-America Apartment Communities expects its earnings growth rate to start accelerating next year.

• W.P. Carey has been rebuilding its portfolio and dividend.

• 10 stocks we like better than Medical Properties Trust ›

I set a goal at the beginning of the year to grow my projected annualized passive dividend income by 20% by the end of this year. I'm a little bit behind that target. Because of that, I plan to double down on boosting my dividend income this December.

I'm starting the month off by purchasing more shares of three top high-yield dividend stocks: Medical Properties Trust (NYSE: MPW), Mid-America Apartment Communities (NYSE: MAA), and W.P. Carey (NYSE: WPC). These real estate investment trusts (REITs) pay attractive dividends that will likely rise over the next year. As a result, they should help provide me with even more passive income in 2026.

Finally healthy

Medical Properties Trust has struggled over the past few years. Two of the healthcare REIT's top tenants filed for bankruptcy, meaningfully impacting its rental income. This made it more challenging for the REIT to refinance debt as it matured, especially given the rise in interest rates over the past few years.

The hospital owner has worked hard to address its issues. It has replaced those financially troubled tenants with stronger operators. The REIT has also sold several properties and cut its dividend a couple of times to repay debt. These moves have paid off as Medical Properties Trust now has a much stronger portfolio and balance sheet.

The REIT expects its rental income to steadily rise over the next year as new tenants ramp up their operations and pay escalating rental rates. This anticipated improvement has given Medical Properties Trust the confidence to start rebuilding its dividend, with investors recently receiving a 12% raise, thereby boosting its dividend yield to 6.3%. I believe the payment will continue rising next year.

Accelerated earnings growth is right around the corner

Mid-America Apartment Communities has been a very reliable dividend stock over the decades. The apartment REIT never suspended or reduced its dividend payment in its over 30 years as a publicly traded company. It has raised its payment for 15 straight years, growing it at an above-average 7% annual rate over the past decade.

The landlord increased its dividend last December, providing investors with a 3.1% raise. I fully expect it will announce another dividend increase this month. While the company has battled supply headwinds over the past few years that have weighed on rental growth rates, it saw a meaningfully lower level of new apartment deliveries in the third quarter. As a result, 2026 should be a much stronger year for rent growth.

Meanwhile, Mid-America Apartment Communities is investing heavily to expand its portfolio. It recently bought a stabilized apartment community in Kansas City. It also purchased land next to that community and in Arizona to support future developments. The landlord is currently investing almost $800 million across seven new developments, five of which it expects to complete by the end of next year. These investments, in the words of CEO Brad Hill in the third-quarter earnings press release, "will fuel earnings growth for years to come." That should enable the REIT to continue increasing its 4.5%-yielding dividend.

Building back even better

W.P. Carey has spent the past year rebuilding its portfolio. The diversified REIT decided to exit the office sector in 2023. It also sold off other non-core properties, including several self-storage facilities. It has been recycling the capital from these sales into higher-quality industrial and retail properties.

The REIT is on track to invest between $1.8 billion and $2.1 billion into new properties this year. These investments have helped grow W.P. Carey's adjusted funds from operations by 5.9% per share through the third quarter. This growing income has also enabled the company to steadily rebuild its dividend. The REIT has raised its payment every quarter since resetting the level in late 2023, including by 4% over the past year.

W.P. Carey's dividend currently yields 5.4%. I expect the payment to continue rising in 2026. Its rebuilt portfolio is delivering sector-leading rent growth. Meanwhile, it has ample financial flexibility to capitalize on its strong investment pipeline.

Growing stronger heading into 2026

Medical Properties Trust, Mid-America Apartment Communities, and W.P. Carey have faced their share of headwinds in recent years. However, those issues are now in the rearview mirror. As a result, these REITs are in stronger positions to grow their high-yielding dividends in 2026 and beyond. That's why I plan to buy more of each one this December to get a head start on generating more passive income in 2026.

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Matt DiLallo has positions in Medical Properties Trust, Mid-America Apartment Communities, and W.P. Carey and has the following options: short January 2026 $4.50 calls on Medical Properties Trust. The Motley Fool has positions in and recommends Mid-America Apartment Communities. The Motley Fool has a disclosure policy.

3 High-Yield Dividend Stocks I'm Buying to Boost My Passive Income in December was originally published by The Motley Fool