Dividend Stocks to Buy for Double-Digit Returns: W.P. Carey (WPC)
Dividend Yield: 6.2%
I’ll add one last REIT to the list of double-digit gainers, retail REIT W.P. Carey Inc. REIT (NYSE:WPC).
WPC is fairly similar to Realty Income, though in addition to its regular public REIT operations, it also has a private REIT business. Private REITs, which sometimes sport large selling commissions, have come under regulatory scrutiny of late, which partially explains why WPC trades at a discount to peers like Realty Income. But I would argue those fears are vastly overdone, and with a dividend yield of 6.2%, WPC would seem like a steal.
There is also a well justified fear that Amazon.com, Inc. (NASDAQ:AMZN) and other internet companies are destroying traditional retail. Well, frankly, they are. But the risk is far more serious for shopping malls and “big box” retailers. Restaurant, light industrial and basic services (think everything from U-Haul locations to gas stations to nail salons) are almost entirely unaffected, and these are the types of properties that the triple-net retail REITs like W.P. Carey tend to buy.
Starting with a 6.2% dividend, WPC has to muster just 3.8% per year in capital gains to generate solid double-digit annual returns. Management would really have to make a mess of things for that not to happen.