Real estate investment trusts (REITs) have not escaped the downturn in the stock market.
Amid growing fears of a possible recession, the Vanguard Real Estate Index Fund ETF (NYSEARCA:VNQ), comprised of roughly 160 REITs, has lost over 22% year to date. It hit a new 52-week low on Jun. 14. In comparison, the S&P 500 has dropped around 20% over the same period.
Yet, investing in REITs that grow their profitability each year and trade at reasonable valuations is a perfect way to accumulate long-term wealth. By law, REITs need to pay at least 90% of their taxable income annually to shareholders. In other words, they are both passive income stocks and real asset investments, two features that make them more resistant to market volatility.
The REITs on our list stand out because of their generous dividends as well as growth prospects. Given recent share price declines, many also offer better fundamental value than last year.
With that information, here are seven REITs that offer a reliable stream of passive income for a profitable summer.
|COLD||Americold Realty Trust||$28.26|
American Tower (AMT)
52 week range: $220.00 – $303.72
American Tower (NYSE:AMT) focuses on providing wireless and broadcast communications infrastructure around the globe. The REIT currently boasts a portfolio of roughly 221,000 sites in 25 countries.
The company announced Q1 financials on April 27. Revenue increased 23.2% year over year to $2.66 billion. Adjusted funds from operations (FFO) came in at $2.55 per share compared to $2.46 in the prior-year period.
Cash and equivalents ended the period at $2.27 billion. Management is anticipating 14% year-over-year growth in revenue and 7.6% growth in adjusted FFO for fiscal 2022.
The ongoing 5G rollout in the U.S. and Europe offers strong tailwinds for long-term growth. Moreover, the acquisition of Coresite Realty is helping American Tower diversify its income stream by adding 25 data centers to its portfolio.
AMT stock has declined almost 14% year to date and generates a 2.4% dividend yield. Shares are trading at 19.8 times book value. The 12-month median price forecast for American Tower stock stands at $285.
Americold Realty Trust (COLD)
52-week range: $23.96 – $40.85
Americold Realty Trust (NYSE:COLD) is an industrial REIT specializing in cold storage of food products. It manages around 250 temperature-controlled warehouses around the globe.
The REIT reported Q1 metrics on May 5. Revenue increased 11.2% year over year to $705.7 million. Adjusted FFO came in at 26 cents, down from 37 cents in the prior-year quarter. As of Mar. 31, the company had total liquidity of $657 million.
Wall Street was pleased that the global warehouse segment revenue increased 11.4% year over year to $541 million, driven primarily by acquisitions. However, while same-store revenue increased 4.5%, same-store net operating income declined by 4.7% due to inflationary pressures and supply chain disruptions.
So far in 2022, COLD stock has lost more than 13%. It currently generates a 3% dividend yield. Shares are trading at 1.7 times book value. The 12-month median price forecast for Americold Realty Trust stock is at $31.
Healthpeak Properties (PEAK)
52-week range: $23.45 – $37.69
Healthpeak Properties (NYSE:PEAK) owns over 450 in-place healthcare properties, mainly medical offices and life science facilities. It also operates several retirement communities.
The healthcare REIT released Q1 financials on May 3. Revenue increased 9.5% year over year to $498.4 million. Adjusted FFO came in at 43 cents, up 7.5% YOY from 40 cents in the prior-year period. Cash and equivalents ended the quarter at $89 million.
Analysts highlight the recession-proof nature of commercial healthcare facilities, where tenants are typically on long-term lease agreements. Furthermore, we all need access to healthcare regardless of how the economy is doing. Therefore, Healthpeak Properties deserves further due diligence.
PEAK stock has fallen 31% in 2022. However, it currently supports a generous 5% dividend yield. Shares are trading at 2.5 times book value. The 12-month median price forecast for Healthpeak Properties stock stands at $35.
Life Storage (LSI)
52-week range: $102.94 – $154.45
Life Storage (NYSE:LSI) manages self-storage properties. It operates more than 1,100 self-storage facilities in 36 states, serving both commercial and residential customers.
The self-storage REIT issued strong Q1 metrics on May 4. Revenue increased 36% year over year to $233.5 million. Adjusted FFO came in at $1.44 per diluted share, up 33% year over year from $1.08 a year ago. Cash and equivalents ended the period at $50 million.
Same-store net operating income grew 21.9% year over year, driven by solid demand. Additionally, Life Storage grew the portfolio during the quarter, acquiring 18 stores for $351.5 million and adding 25 stores to its management platform.
LSI stock has dropped more than 27% so far this year but currently supports a 3.9% dividend yield. Shares are priced at 2.7 times book value. Wall Street’s 12-month median price forecast for Life Storage stock is at $142.50.
Realty Income (O)
52 week range: $62.74 – $75.40
With a global portfolio of over 11,000 single-tenant properties, Realty Income (NYSE:O) is one of the largest REITs worldwide. It develops single-tenant stand-alone properties and leases them out to high-traffic tenants via long-term leases.
Realty Income announced Q1 results on May 4. Revenue increased 82% year over year to $807.3 million. Adjusted FFO per share increased 14% to 98 cents compared to the prior-year period.
In February, the single-tenant REIT made its first acquisition in the gaming industry. It bought the Encore Boston Harbor Resort and Casino from Wynn Resorts (NASDAQ:WYNN) for $1.7 billion.
Passive income investors will be interested to know that Realty Income has made 623 consecutive monthly dividend payments to investors. It has also increased payout for 99 consecutive quarters. The Dividend Aristocrat currently generates a robust 4.7% dividend yield.
So far in 2022, O stock has declined 8%. Shares are trading at 1.6 times book value. The 12-month median price forecast for Realty Income stock stands at $75.50.
Stag Industrial (STAG)
52-week range: $30.65 – $48.27
Stag Industrial (NYSE:STAG) is one of the most reliable REITs that focus on single-tenant industrial real estate across the U.S. Its portfolio includes light industrial properties, warehouses, and logistics facilities. It owns more than 500 warehouses with roughly 100 million square feet of leasing space.
The REIT issued Q1 results on May 3. Revenue increased 19% year over year to $159.2 million. Core FFO per diluted share came in at 53 cents, increasing 8.2% year over year from 49 cents in the prior-year period. Cash and equivalents ended the period at $34.8 million.
Increasing e-commerce adoption during the pandemic has meant tailwinds for long-term growth, especially in the warehouse sector. In Q1, Stag Industrial signed 3.1 million square feet of leases and acquired $166.4 million of properties.
So far in 2022, STAG stock has lost almost 34%, but the decline has increased the dividend yield to 4.8%. Shares are now trading at 1.7 times book value. Analysts’ 12-month median price forecast for STAG stock is at $43.
Vici Properties (VICI)
52-week range: $26.23 – $33.95
Vici Properties (NYSE:VICI) is the largest gaming REIT worldwide. It focuses on casinos, hotels, dining, entertainment and retail properties.
Management recently completed the strategic acquisition of MGM Growth Properties for $17.2 billion. The combined company boasts a diverse portfolio of more than 43 gaming facilities and 122 million square feet of property.
Vici Properties released Q2 results on May 4. Revenue increased 11.3% year over year to $416.6 million. While adjusted FFO increased 19.8% YOY to $305.5 million, adjusted FFO per share declined 5.1% year over year to 44 cents. Cash and equivalents ended the period at $568.7 million.
Vici enjoys a 100% occupancy rate, with roughly 97% of its rental agreements containing automatic escalators tied to the consumer price index, providing a hedge against rising inflation.
VICI stock is trading almost flat for the year. Yet, the stock currently generates an impressive 5.1% dividend yield. Shares are changing hands at 1.8 times book value. Lastly, the 12-month median price forecast for Vici Properties stock stands at $35.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.