Agree Realty (ADC -0.50%) has been a very consistent dividend stock over the years. The real estate investment trust (REIT) pays a monthly dividend that has grown at a 5.7% compound annual rate over the past decade.

The retail REIT recently increased its monthly payment by another 1.2%, bringing its total raise over the past year to 2.4%. Its dividend currently yields 4%, which is more than triple the S&P 500's dividend yield (less than 1.3%).

The retail REIT has grown more slowly over the past year due to the impact of higher interest rates. However, with rates starting to fall, the company has started stepping on the accelerator by ramping up its acquisition volume. That could drive faster dividend growth in the future.

The steady growth continues

Agree Realty recently reported its third-quarter earnings. The REIT posted $1.03 per share of adjusted funds from operations (FFO), a 2.8% increase from the prior year.

That growing earnings helped support a 2.4% year-over-year increase in its monthly dividend. With its cash flow growing faster than its dividend payment, Agree Realty maintained a very conservative dividend payout ratio of 72% of its adjusted FFO.

Accretive acquisitions are the main factor driving that growth. Agree Realty invested about $237 million into 93 retail net lease properties during the third quarter. That brought its year-to-date total to $524.9 million across 144 properties.

The company acquired properties in various retail sectors, like general merchandise, warehouse clubs, home improvement, auto parts, tire and auto service, and grocery stores. It purchased properties at an attractive real estate cap rate average of 7.6%, with a weighted average remaining lease term of about 9.2 years. Investment-grade tenants leased more than 60% of the properties it bought. Given these features, the company's acquisitions should supply it with an attractive and stable stream of rental income for many years to come.

Agree Realty also continued to raise cash to fund future investments. The REIT sold 6.6 million shares for an estimated $469 million in net proceeds in the quarter and also sold two properties for $7.2 million, bringing its year-to-date total to 18 properties for $66.4 million.

These moves bolstered the company's liquidity to $1.9 billion while strengthening its balance sheet. Agree Realty ended the quarter with a low 3.6 times leverage ratio, giving it lots of financial flexibility.

Pumping up the volume

The REIT has been accelerating its acquisition volume this year while also strengthening its balance sheet. As a result, it currently has record liquidity to capitalize on future investment opportunities, which is giving the company the confidence to further ramp up its acquisition volume. It now expects to invest about $850 million this year, an increase from its prior outlook of $700 million.

In addition to making acquisitions, Agree Realty is also investing in development projects and expanding its developer funding platform, where it provides capital to companies developing net lease retail properties. The company invested $134.8 million across 33 projects this year and ended the third quarter with about $47.1 million of funding costs remaining on its existing projects. That includes eight projects it committed to fund in the third quarter that will cost about $34 million.

Agree Realty's adjusted FFO per share should continue rising as it invests in more properties. The company currently expects its adjusted FFO to be in the range of $4.12-$4.14 per share this year, which implies about 4.6% growth at the midpoint from last year. Given the recent acceleration in its acquisition volume, the REIT will have a lot of momentum heading into 2025.

Growing faster

Agree Realty has managed to continue growing this year, despite headwinds from higher interest rates. However, that headwind is fading, which is allowing the REIT to ramp up its acquisition volume. That should accelerate its growth rate, which could enable it to increase its dividend at a faster pace in the coming years. Add that to its already attractive yield, and Agree Realty is a great stock for those seeking a steadily rising stream of passive dividend income.