Companies with higher dividend yields tend to be riskier. They usually have some issues that have weighed on their valuations and are pushing up their dividend yields. Those problems can sometimes cause these companies to reduce or suspend their dividends.

However, their payouts become more durable as they work through their issues. That's currently the case with W.P. Carey (NYSE: WPC) and EPR Properties (NYSE: EPR). The real estate investment trusts (REITs) have had to reduce their dividends in recent years due to some issues with certain property types they owned. They have addressed those problems, putting their big-time dividends on much more sustainable foundations. They're now in a great position to produce durable and growing dividend income for the next decade or more.

Building back better

W.P. Carey had been an elite dividend stock until last year. It had increased its payment every single year for a quarter-century. However, headwinds facing the office sector since the pandemic weighed on that part of its portfolio. That led the REIT to make the strategic decision to exit the office sector. As a result, it reset its dividend level to reflect its lower earnings and a desire to have a more conservative dividend payout ratio. It reduced the rate from around 80% at the time to a target range of 70%-75%.

Even with that cut, the diversified REIT still offers a very high dividend yield of nearly 6%. That payout is much more sustainable because the company has a stronger portfolio and financial foundation. It's using the proceeds from the sale of offices to invest in properties with better long-term fundamentals, like industrial real estate. It also used the sales to strengthen its financial foundation. Its leverage ratio is currently below its target range in the mid-to-high fives at 5.4.

W.P. Carey has already started building back its dividend, increasing it three times this year. It expects to continue growing its dividend in the future at around the same rate as it increases its adjusted funds from operations (FFO). Its FFO should rise as rents increase and it makes accretive acquisitions. With a much more sustainable portfolio and balance sheet, W.P. Carey is in an excellent position to deliver a stable and growing dividend in the coming decade.

Coming back stronger

EPR Properties has also faced pandemic-related headwinds in recent years. The REIT focuses on owning experiential real estate like movie theaters, eat-and-play venues, and other attractions. Many of its properties had to shut their doors during the pandemic, which affected its tenants' ability to pay rent. That forced the REIT to suspend its dividend until things started returning to normal.