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7 Dividend Stocks to Profit off the Hot Real Estate Market

dividend stocks - 7 Dividend Stocks to Profit off the Hot Real Estate Market

Source: Shutterstock

There’s no doubt that we’re waist deep in a sector rotation (to be kind) or a slow moving correction (to be dour). Either way, there are still opportunities in the market and one more popular choice is becoming dividend stocks.

You have heard by now that interest rates, which in this case means mortgage rates, are rising. The first response to this is to avoid real estate. But that’s not necessarily the lesson.

If real estate values are rising faster than rates, then it’s still a good net investment. And the fact that there’s still more demand than supply suggests we’re still in a sweet spot.

Also, if you’re a real estate investment trust (REIT), you can also raise rents or lease rates. And most of your debt has been acquired under low-rate loans, so your margins grow.

That’s why I wanted to share these dividend stocks with you now. They have rock-solid dividends and still have plenty of growth left up their sleeves.

  • American Tower REIT (NYSE:AMT)
  • Extra Space Storage (NYSE:EXR)
  • Duke Realty (NYSE:DRE)
  • Lamar Advertising Co (NASDAQ:LAMR)
  • Equity Lifestyle Properties (NYSE:ELS)
  • Prologis (NYSE:PLD)
  • VICI Properties (NYSE:VICI)

7 Dividend Stocks: American Tower REIT (AMT)

Antenna Telephone and communication towers have a sunset background. American Tower (AMT) is one of the largest 4G tower operators in the U.S.
Source: SERDTHONGCHAI / Shutterstock.com

If you heard about the recent kerfuffle regarding restrictions on certain airplanes landing at U.S. airports due to 5G signals, then you understand that 5G is a totally different animal than 4G.

And that’s a good thing for this dividend stock. AMT is one of the leading telecom tower owners and operators in the world at this point.

I has been in the business since 1995, so it had a headstart on many competitors and has been able to consolidate its lead by acquisition or competition. And the good news for the company is 5G requires an entirely new set of antenna arrays, repeaters, etc.

The telecom tower industry has some pretty significant barriers to entry at this point. And given AMT’s strategic properties it has built in the past few decades, it has a comfortable competitive moat.

AMT stock still has a 10% gain in the past 12 months, and a 2.3% dividend. It’s trading at the midpoint of its 52-week range. This is a long-term buy — as are all quality dividend stocks — at current prices.

This stock has a “B” rating in my Dividend Grader.

Extra Space Storage (EXR)

Extra Space Storage (EXR) facility exterior and trademark logo.
Source: Ken Wolter / Shutterstock.com

Whenever there’s economic disruption like a pandemic or the current supply chain issues, or sector booms like real estate, electric vehicles, etc., people rethink their living arrangements.

Some downsize. Others move to where the new opportunities lie. Some move to find new opportunities. Some start side gigs to supplement their income.

Whatever the reasons, storage units become strategically valuable. In good times and bad times, storage units do very well.

Last year, EXR was the second largest self-storage facility REITs in the U.S. It has over one million units and it also has a reinsurance business, which offers insurance to storage renters.

EXR stock has gained 65% in the past 12 months and trades in the upper end of its 52-week range. It has a solid 2.6% dividend. This is a quality long-term dividend stock.

This stock has an “A” rating in my Dividend Grader.

7 Dividend Stocks: Duke Realty (DRE)

Duke Realty (DRE) corporate headquarters. Duke Realty owns and operates more than 149 million square feet of logistics properties.
Source: Jonathan Weiss / Shutterstock.com

The digital economy is in full swing. And e-commerce truly became an entrenched consumer behavior during the pandemic. That means the U.S. market needs more warehouses to distribute all those goods.

It just so happens that DRE is one of the largest warehouse REITs in the business. And many of its best customers are e-commerce businesses. This bodes well for its future growth. It means its current properties are running on all cylinders and it has the wherewithal to build out more facilities to expand its distribution effectiveness.

It’s been in business since 1972, so it has seen all there is to see in the REIT world. If you’re looking for a conservative dividend stock that is hooked into one of the biggest long-term trends around, DRE has to be on that list.

DRE stock has grown 45% in the past 12 months yet has a current of just 24. While its dividend is just 1.9%, it’s rock solid.

This stock has an “A” rating in my Dividend Grader.

Lamar Advertising (LAMR)

Dillsburg Veterinary Center billboard
Source: Andriy Blokhin / Shutterstock.com

While everyone is transitioning to work from home and staring at computer screens once again, there’s one sector that continues to exist, whether we’re looking or not — outdoor advertising. I’m talking about billboards, buses, airports, etc.

Lamar has been in the outdoor advertising business since 1902 and has hundreds of thousands of billboards — and their property — around the country. It’s been a REIT for almost a decade now.

Granted, this isn’t a hot growth industry. But LAMR’s stable business model means it’s a solid dividend stock with reliable growth. It’s a great foundational total return choice.

LAMR stock has gained nearly 30% in the past 12 months, and still has a 3.7% dividend. It also has a $10 billion market capitalization, so it’s not going to blow away in stiff economic winds.

This stock has a “B” rating in my Dividend Grader.

7 Dividend Stocks: Equity Lifestyle Properties (ELS)

Winter RV camping on coast of California. Equity LifeStyle Properties (ELS) owns numerous RV resorts and campgrounds like this one.
Source: Arina P Habich / Shutterstock.com

One of the big changes the pandemic has brought to the U.S., in particular, is a new way to think about work and life. Younger generations have taken to the road in massive numbers, as have younger families and retirees.

Because of this, motor home lifestyles have changed from the old days. Modern mobile homes and communities have more amenities and modern conveniences. Living out of a motor home or a recreational vehicle (RV) is a much different experience.

One company that’s responsible for these changing expectations is ELS. It has more than 200 RV resorts and campsites, and 23 marinas with more than 6,000 slips in 33 states and British Columbia. Plus it’s a niche REIT in this sector.

It’s not one of the sexiest dividend stocks on the list, with its current 1.9% distribution, but ELS has a nearly $15 billion market cap. It has plenty of cash to splash on new properties and upgrades to existing ones. ELS stock is up 19% in the past 12 months, and plenty of growth down the road (pun intended).

This stock has a “B” rating in my Dividend Grader.

Prologis (PLD)

The Prologis (PLD) logo displayed on a smartphone screen.
Source: rafapress / Shutterstock.com

I have to assume that if you haven’t heard of the supply chain issues that have been rocking the U.S. economy you live off the grid somewhere and just arrived in civilization to check your email or fantasy football team’s efforts.

PLD is one of the world’s largest REITs focused on logistics properties. And at this point, it has around 1 billion square feet of them spread across 19 countries. Its mission is to thrive in high-barrier, high-growth markets where it can create a competitive moat. And it has done a very good job of it.

Remember, as a REIT, it leases these properties to the companies that operate the facilities. It’s not a cause of the supply chain crisis. And its products are in high demand, so it has pricing advantages right now and moving forward.

PLD stock has returned 55% in the past 12 months, but it has plenty of growth left ahead. That kind of growth reduces the dividend, so it’s one of the lower distributions of the dividend stocks here, at 1.6%. But whether it’s growth or income, PLD is worth a place in your portfolio.

This stock has a “B” rating in my Dividend Grader.

7 Dividend Stocks: VICI Properties (VICI)

Caesar's Palace on the Vegas Strip in Las Vegas, Nevada
Source: travelview / Shutterstock.com

In 2015, Caesars Entertainment Corporation (owner of Caesar’s Palace Casino and other casinos and resorts) filed for Chapter 11 bankruptcy. In 2017, VICI was spun off as a REIT that now owns 29 casinos, hotels, and racetracks, as well as four golf courses around the U.S.

While the pandemic hurt Las Vegas and other business, its properties are coming back to life again. More than the other dividend stocks here, VICI is a comeback story. Also remember VICI has the Caesars name, so it has made a significant effort to offset lost foot traffic in its properties with a big push into online betting.

The good news for investors, especially those looking for big paying dividend stocks, is that VICI is a bargain here. The stock has a current price-earnings (P/E) ratio below 15 and has a 12-month return just below 3%. But its current dividend is almost 5.3%. VICI is set up for growth and solid dividends moving forward.

This stock has a “B” rating in my Dividend Grader.

On the date of publication, Louis Navellier has positions in AMT and EXR in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

 The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

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