Mortgage rates may be on the rise but so can your dividend income…
If you’re looking to generate income that can also grow over time along with inflation there are few investment options that can beat real estate. There’s just one catch: Owning real estate and operating your property empire can be time-consuming and costly. Enter the Real Estate Investment Trust (REIT) an entity designed to own a diverse portfolio of real estate assets (that hopefully grows in value over time) as well as pass through rental income through to investors.
Best of all for the mom-and-pop investor, most REITs find themselves trading on major exchanges and offer multiple benefits to investors. Historically speaking, REITs have delivered exceptional total returns based on high and steady dividend income as well as long-term capital appreciation. As a kicker, REIT’s low correlation with other assets also makes them an instant diversifier for your portfolio that can help reduce risk and increase returns.
Having recently conducted a deep-dive on the sector, here are the Bottom Line Team’s favorite REITs for your consideration…
REIT #1 – Iron Mountain Incorporated $IRM – Yield: 5.35%
Currently trading at $46.22, this REIT is a no-doubter. Not only will your initial investment be very low, but Iron Mountain also has an impressive growth record. The company’s revenue is forecasted to grow faster (7.76% per year) than the U.S. REIT industry average (5.53%). Outside of revenue, Iron Mountain is also trading below its estimated intrinsic value of $94.20.
Iron Mountain also provides a route to making money while you sleep. The company is one of “Good Value” based on its Price to Earnings and Rate of Earnings Growth, measured by the PEG ratio (0.79x). Iron Mountain also provides an amazing dividend yield of 5.35%, so take your money and consider sitting it in Iron Mountain Inc. More dividend information:
- IRM dividends have increased over the last 10 years.
- IRM dividends (5.35%) are in the top 75% of all U.S. listed companies.
- IRM dividends (5.35%) are in the top 25% of all U.S. listed companies.
REIT #2 – Vici Properties Inc. $VICI – Yield: 4.89%
If you thought Iron Mountain was a steal, this will blow your mind. Vici Properties is trading below $30 ($28.81). It is also trading below its intrinsic value of $48.80. Revenue for Vici is also expected to grow at an amazing rate. Vici’s revenue is forecasted to grow at an exceptional rate of 34.36% per year.
The company is one of “Good Value” based on its earnings relative to its share price (17.46x), compared to the US market average of 19.26x). Dividends are also a virtue with Vici as the REIT gives a great offering of a 4.89% yield. More dividend information:
- VICI’s dividend has not dropped by more than 10% at any point in the last 5 years.
- VICI dividends have increased over the last 5 years.
- VICI dividends (4.89%) are in the top 75% of all U.S. listed companies.
- VICI dividends (4.89%) are in the top 25% of all U.S. listed companies
- VICI earnings ($984.43M) are sufficient to cover VICI’s dividend payouts (85.5%).
REIT #3 – Simon Property Group $SPG – Yield: 8.26%
With a Market Cap of $35.97 billion, Simon Property Group is one of the larger REITs on the list. The company may lack in revenue growth with a forecast to grow at a rate of 1.54% per year, which is not exceptional, but Simon Property Group’s earnings are forecasted to grow at an exceptional rate of 23.04% per year.
It is no reason analysts give Simon Property Group a “Buy” rating and a 1-year price target of $152.94 (average). The company also promises a dividend yield of 8.26%, which is higher than most “blue chip” stocks and stocks that claim to be “dividend kings.” More dividend information:
- SPG dividends have increased over the last 10 years.
- SPG dividends (8.26%) are in the top 75% of all U.S. listed companies.
- SPG dividends (8.26%) are in the top 25% of all U.S. listed companies.
Check out: 3 Stocks Crushing It Despite the Bear Market Selloff
REIT #4 – Medical Properties Trust Inc. $MPW – Yield: 7.94%
If you can spend $15.00 on things you don’t need, reconsider and spend it on a share of Medical Properties Trust currently trading at $14.36. The estimated 1-year price target of $22.50 compliments the amazing fact that MPW has demonstrated consistent long-term earnings growth over the past 10 years (795.24%).
Not only are earnings amazing for this REIT, but dividends play a key role in its attractiveness.
- MPW’s dividend has not dropped by more than 10% at any point in the last 10 years.
- MPW dividends have increased over the last 10 years.
- MPW dividends (7.94%) are in the top 75% of all U.S. listed companies.
- MPW dividends (7.94%) are in the top 25% of all US listed companies.
- MPW earnings ($1.12B) are sufficient to cover MPW’s dividend payouts (60.1%).
REIT #5 – Annaly Capital Managent Inc. $NLY – Yield: 15.41%
Annaly is the lowest valued REIT on this list, however, it boasts amazing earnings. Annaly is of “Good Value” based on its earnings relative to its share price (3.28x), compared to the U.S. REIT Mortgage industry average (5.06x). Also, Annaly has demonstrated consistent long-term earnings growth over the past 10 years (194.92%).
Not only are the earnings appealing, but the dividend yield is amazing for a REIT at $5.71. With just a $5 bill, you can be earning a dividend yield of nearly 15%. More dividend information:
- NLY dividends (15.41%) are in the top 75% of all U.S. listed companies.
- NLY dividends (15.41%) are in the top 25% of all U.S. listed companies.
- NLY earnings ($2.55B) are sufficient to cover NLY’s dividend payouts (50.6%).
Sponsored
One Nation, Under Inflation
At this moment the US national debt exceeds $30Trillion. Yes, you read that right. $27 TRILLION.
If every American citizen—including your children and grandchildren!—were to help pay the debt, every one of us would owe $91,500!
Government bureaucrats know the only way out of this $30 Trillion-dollar hole is one thing: printing money.
Because while the dollar is legal tender, no one ever said what that dollar had to be worth. No wonder inflation just clocked in at 8%…
And that means anyone with a bank account or retirement savings is facing a possible erosion of wealth in the years ahead.
In 2008, millions of Americans like you and me lost over 50% of their IRA/401(k) almost overnight.
If you are concerned, and if you’re not one to sit around and wait for things to happen, there are steps you can take. There is a rule in the tax code that could help you not only protect but also GROW your wealth.
