Real Estate Investment Trusts, or REITs, are an asset class allowing investors to gain real estate exposure without buying properties. Investors could be interested in REITs for many reasons, but the most likely one is elevated dividend yields.
Not only do most REITs have higher yields than the S&P 500, but they also regularly outperform the market.
Furthermore, REIT stocks are less vulnerable to significant market corrections than other stocks since they hold onto tangible assets (real estate properties). This makes them better investment options than any other asset class for investors looking for low-risk stocks.
While many great REITs are on the market, some are head and shoulders above the competition for various reasons. These three, in particular, are must-haves for any investor interested in REITs this July.
Agree Realty (ADC)
Agree Realty (NYSE:ADC) is a real estate company specializing in the ownership, acquisition, development, and management of retail properties. Its portfolio includes over 2000 properties scattered across the country, including Texas, Ohio, Florida, Michigan, Illinois, North Carolina, New Jersey, New York, Georgia and California.
Since retail is a massive part of the U.S. economy, retail REIT stocks are among the best REIT stocks to invest in. Agree Realty, in particular, is a prominent retail REIT stock whose customer base includes some of the most popular household names in the U.S., such as Walmart, Tractor Supply, Best Buy and Dollar General.
Furthermore, Agree Realty is one of the fastest-growing REITs in the industry, as evidenced by its impressive 99.6% lease rate and average lease term of 8.2 years. It is also renowned for paying out high-yield dividends, making it an attractive option for investors seeking the best income and growth stocks. Its total return over the past 10 years stands at 216%. In contrast, the S&P 500’s return is 237% over the same period.
Financially, Agree Realty is one of the best-performing real estate companies in the industry. According to its latest quarterly report, the company saw massive increases across key metrics, such as net income and core funds from operations. Its net income increased by 8.2% to $43 million, while its core funds from operations increased by 14.6% to $102 million.
Alexandria Real Estate (ARE)
Alexandria Real Estate (NYSE:ARE) is a real estate company based in Pasadena, California, that invests, operates, develops and leases office buildings and laboratories to life science companies, technology companies and other tenants involved in research and development.
The company maintains major pricing power since it has a specific clientele to which it rents its properties. Its funds from operations have grown by an average of 7% annually over the past decade, and its revenue has steadily increased over the same period. More than 90% of the company’s rental income comes from investment-grade or publicly traded tenants.
It has also managed to sustain its profitability year after year. The company has raised its dividends for 14 consecutive years at a modest payout rate of 55%, leaving room for further increases in the coming years.
Furthermore, the company has performed impressively on the financial front this year. Its latest earnings report details its performance in key metrics, such as market capitalization and total equity capitalization. Its total market capitalization is $34.4 billion, while its equity capitalization is $22.2 billion, placing the company in the top 10% of all publicly traded U.S. REITs.
National Storage Affiliates Trust (NSA)
National Storage Affiliates Trust (NYSE:NSA) is a self-storage real estate company based in Greenwood Village, Colorado. Its portfolio comprises 12 self-storage brands, 1,000+ storage facilities and 700+ properties.
All the properties in the company’s portfolio operate under its corporate brands, which include iStorage, Move It Storage, Northwest Self Storage and SecurCare Self Storage. Furthermore, the company enjoys loyalty from most of its customers. According to its first-quarter results, it maintained an 85.9% occupancy rate.
National Storage Affiliates Trust is an attractive option for investors interested in REIT stocks because it capitalizes on the growth opportunities in the self-storage space. Its immense revenue growth from 2019 to 2023 is evidence.
The company’s revenue grew from $383 million to $866 million in that period. The company has also sustained its profitability this year, evidenced by its latest quarterly dividend report. It saw massive increases across key metrics like net income, which increased by 135.4% and reached $95.1 million. It also reported high quarterly profit margins, closing out with a 30.4% net profit margin.
On the date of publication, Joel Lim 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
