Income investors looking for high-yield stocks with growth potential should consider investing in real estate investment trusts, or REITs for short.

The appeal of REITs is straightforward: REITs allow anyone the opportunity to profit from real estate properties, without actually having to own property. REITs operate across a number of sectors, including industrial, healthcare and retail.

REITs are required to distribute the vast majority of their taxable income to shareholders, in exchange for a favorable tax status. As a result, investors can find high dividend yields across the REIT universe. In addition, investors should focus on REITs with quality business models and sustainable dividend payouts. These 3 REITs have safe dividends, even in a recession, along with their high yields.

Realty Income (O)

Realty Income (NYSE:O) is a retail focused REIT that owns more than 4,000 properties. Realty Income owns retail properties that are not part of a wider retail development (such as a mall), but instead are standalone properties. This means that the properties are viable for many different tenants, including government services, healthcare services and entertainment.

In the 2022 first quarter, Realty Income reported 82% year-over-year revenue growth, due in large part to the previous acquisition of VEREIT. On an adjusted basis, AFFO-per-share came to 98 cents for the quarter. The company continues to expect record results for 2022, forecasting AFFO of approximately $3.97 per share.

Realty Income generates its growth through growing rents at existing locations, via contracted rent increases or by leasing properties to new tenants at higher rates, but also by acquiring new properties.

Management invested about $2.1 billion in new properties during 2020, and another $6.4 billion during 2021. Realty Income expects to increase its investments in international markets during the next couple of years. It made a first deal in the UK in 2019 and plans to do more such deals in the future when it finds attractive targets. These acquisitions will help drive profits in the long run.

Realty Income is well-known for its monthly dividend payments. Indeed, the company has now declared 625 consecutive monthly dividends, a track record that goes back more than 50 years. Realty Income has also increased its dividend for over 25 consecutive years, placing it on the exclusive list of Dividend Aristocrats. In fact, Realty Income is only one of three REITs on the Dividend Aristocrats list. Shares currently yield 4.1%.

Federal Realty Investment Trust (FRT)

Federal Realty (NYSE:FRT) was founded in 1962 and concentrates in high-income, densely populated coastal markets in the US, allowing it to charge more per square foot than its competition.

Federal Realty was one of the harder-hit REITs from the coronavirus pandemic, but the recovery has been even stronger in turn. In the 2022 first quarter, FFO per share came in at $1.50, up 28% from $1.17 in the year-ago quarter. Total revenue increased 17.7% to $257 million.

Future growth is anticipated due to acquisitions. During the first quarter, Federal Realty continued record levels of leasing with 119 signed leases for 444,398 square feet of comparable space. The trust’s portfolio, during the quarter, was 91.2% occupied and 93.7% leased, up by 170 basis points and 190 basis points, respectively, year-over-year. Moreover, small shop leased rate was 88.7%, up by 130 basis points quarter-over-quarter.

Federal Realty also reported Q1 comparable property operating income growth of 14.5%. Meanwhile, the company raised its 2022 earnings per share guidance to $2.36-$2.56 from $2.30-$2.50 and FFO per diluted share guidance to $5.85-$6.05 from $5.75-$5.95.

Federal Realty’s growth moving forward will be comprised of a continuation of higher rent rates on new leases and its impressive development pipeline fueling asset base expansion. Margins are expected to continue to rise slightly as it redevelops pieces of its portfolio and same-center revenue continues to move higher.

As the economy emerges from the Covid-19 crisis, we expect results to support the long-term thesis for Federal Realty as same-store net operating income continues to grow and occupancy remains robust.

Federal Realty’s competitive advantages include its superior development pipeline, its focus on high-income, high-density areas and its decades of experience in running a world-class REIT. The company has increased its dividend for over 50 years in a row, placing it on the Dividend Kings list. FRT is the only REIT on the Dividend Kings list. Shares currently yield 4.2%.

Safehold (SAFE)

Safehold (NYSE:SAFE) issued its initial public offering on June 22, 2017 with iStar as its manager and primary investor. Safehold is a ground lease REIT that provides a more capital-efficient way for businesses to own buildings. The trust engages in long-term sale and leasebacks of land underneath commercial properties across the United States and is the only REIT focused entirely on ground leases to support real estate investment and development.

The strategy has worked, as the company is generating strong growth. In the 2022 first quarter, earnings-per-share increased 35% to 43 cents year-over-year. Revenue increased 39% to $60.4 million. During the quarter, Safehold closed $677 million of new originations, making the total portfolio to $5.5 billion. The company’s portfolio generated annualized in-place cash rent of $164 million with an annualized yield of 5.1% and an inflation-adjusted yield of 5.7%.

With an annualized yield of 5.4% and weighted average rent coverage of 3.3x on its investments, the REIT generates an attractive combination of profitability and safety. In 2022, the analyst consensus is for revenue to grow by 27.9%. Over the next five years, we forecast an annualized net asset value per share growth rate of 6.8% given that Safehold is the leader in a massive total addressable market estimated to be $7 trillion.

Ground leases are appealing for long-term investment. The terms are extremely long (sometimes up to 99 years long), rent coverage is over 3x, and the loan to value is at a conservative level. As a result, Safehold is very recession resistant, and we fully expect its cash flows to remain very stable through all economic environments.

The dividend is also quite safe as the payout ratio is just 36% expected for 2022. The dividend should grow over time as Safehold continues to scale and reduces its payout ratio even further. Shares currently yield 1.7%, which is fairly low for a REIT, but growth makes up for the low yield. The company recently hiked its dividend by 4%.

On the date of publication, Bob Ciura did not have (either directly or indirectly) positions in any of the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.