6 Best REITs to Invest In Now
By: Jordan Ellis,
Six best REITs to invest in now to help investors obtain consistent returns also offer attractive dividend yields.
The real estate market has had a challenging last couple of quarters due to high interest rates, unrelenting inflation and recession fears. Even with these risks, REITs are becoming an enticing investment because of exposure to the real estate market without the hassle of owning properties directly.
If the Federal Reserve can curb this inflationary period and keep the economy from sliding into a recession, REITs should benefit. REITs also offer an alternative to investing in U.S. exclusive equities and securities amidst the recent debt-ceiling dangers in the market.
6 Best REITs to Invest In Now: Prologis Inc.
- Prologis Inc. (NYSE: PLD)
Annual Dividend Yield: 2.87%
Prologis Incorporated, of San Francisco, California, is the largest REIT in the world and operates in 17-plus countries. Prologis’ main focus is on logistics-centered real estate with high barriers to entry and strong growth potential. Despite increasing inflation and high interest rates, Prologis obtained a 7.65% stock increase from June 2022 to June 2023. The REIT’s presence in logistics properties is relatively risk-averse compared to REITs in general, since delivery services are in high demand after the COVID-19 pandemic.
Prologis tops the list as one of the best REITs for 2023 because it owns high-barrier-to-entry properties and operates in a multitude of different real estate locales. Due to the company’s large portfolio size and its strong debt-to-equity ratio of 0.43, it should be able to weather potential inflation increases or recessionary risks. If investors are looking for substantial and consistent dividend yields that follow the market, Prologis could be the answer.
Chart courtesy of www.stockcharts.com
6 Best REITs to Invest In Now: National Retail Properties
- National Retail Properties (NYSE: NNN)
Annual Dividend Yield: 5.04%
National Retail Properties, of Orlando, Florida, is a REIT that invests primarily in long-term leases of retail stores in the United States. The company boasts reliable income streams from its multitude of long-term leases. Amid unpredictable interest rates, National Retail Properties offer consistent dividend returns with plenty of investment diversity.
In the real estate market, cash flow is king. National Retail Properties obtains some of the most stable cash flows in the industry due to its long-term leasing set-up, which should help weather any recessionary period that occurs.
While National Retail Properties is well-positioned, it is not immune to a drop in its share price. The company endured a 5.8% stock decrease from June 2022 to June 2023. But, if investors are looking for relatively high annual dividends, not many REITs are better than National Retail Properties.
Chart courtesy of www.stockcharts.com
6 Best REITs to Invest In Now: American Tower Corporation
- American Tower Corporation (NYSE: AMT)
Annual Dividend Yield: 3.35%
American Tower Corporation, of Boston, Massachusetts, is an owner and operator of more than 181,000 wireless and broadcast communications facilities on a global scale of 20 countries. This REIT, much like National Retail Properties, operates on long-term leases to communications and wireless carriers, which boast strong cash flows and reliable yearly income. The company has a debt-to-equity ratio of 2.54, which suggests low long-term debt and risk of bankruptcy.
AMT focuses heavily on leasing its communications equipment to large wireless carriers. With the introduction of technology like 5G and ultra-high-speed internet, the management of American Towers will not have to worry about absent tenants. The wireless and broadband industry has an extremely high barrier to entry, and it is unlikely that AMT will stop boosting its dividend each quarter since 2012. The REIT’s current dividend yield of around 3% lets investors be paid for their patience as owners of AMT shares.
Chart courtesy of www.stockcharts.com
6 Best REITs to Invest In Now: Digital Realty Trust
- Digital Realty Trust (NYSE: DLR)
Annual Dividend Yield: 4.68%
Digital Realty Trust, of Austin, Texas, is a leading provider of data center solutions, catering to a large global audience of companies in need of data and computing storage. In today’s rapidly expanding digital landscape, businesses from all sectors require reliable data centers to store information, create computing power and adapt to new digital interfaces. With the growing demand for data centers, DRT’s portfolio has great growth potential.
Digital Realty Trust can serve as a stable long-term real estate investment. The company’s structure, which primarily consists of long-term commercial leases, helps offset market volatility and reduces the likelihood of a stock price crash. With an annual dividend yield of about 4.6%, DRT could be the answer to investors looking to find stability in the thriving digital space.
Chart courtesy of www.stockcharts.com
6 Best REITs to Invest In Now: Ventas, Inc.
- Ventas, Inc. (NYSE: VTR)
Annual Dividend Yield: 3.97%
Ventas, Inc. is a health care REIT based in Chicago, Illinois. It specializes in investing and operating a wide range of health care properties, including medicinal research facilities and senior-living homes. The post-COVID era has highlighted the importance of health care spending, which provides a strong market foundation for the foreseeable future.
Ventas boasts a strong balance sheet, with a 2023 current ratio (current assets/current liabilities) of 1.71. This indicates the company will have no trouble paying off short-term debt. Furthermore, Ventas obtained an operating cash flow ratio (net operating cash flows/average liabilities) of 0.96, which suggests that Ventas’ leasing operations are in a stable position for the future. Owners of this stock could potentially keep earning a steady annual dividend yield for years to come. Its current dividend yield is an enticing 4%.
Chart courtesy of www.stockcharts.com
6 Best REITs to Invest In Now: Apartments, Investments, and Management Company (Aimco)
- Aimco (NYSE: AIV)
Aimco, of Denver, Colorado, is a REIT focusing on investment, ownership and management of mainly apartment buildings. As of June 2023, Aimco operates 21 residential apartment communities comprising 5,582 apartment homes. Although smaller in size compared to other REITs on this list, Aimco presents an extremely attractive investment opportunity. With one of the strongest balance sheets in the industry, Aimco increased net income by a staggering $97.1 million from December 2021 to December 2022. The company also possesses roughly $380 million in liquid assets, suggesting further portfolio expansion.
Aimco is one of the most sought-after REITs in 2023 due to its strong performance, evidenced by a 20.% stock increase from June 2022 to June 2023. While it could be valuable in a fast-growth portfolio, it is not susceptible to U.S. market risk because of the company’s lack of international exposure and diversification in multiple industries.
Chart courtesy of www.stockcharts.com
6 Best REITs to Invest In Now
Investors seeking to capitalize on the rebounding real estate market may find these six top-performing REITs highly rewarding.
Want more? Read our related articles:
The Ultimate Guide to Investing in REITs
Why Do REITs Have High Dividend Payout Ratios?
The 13 Types of REIT Stocks and How to Invest in Them
Investing in REITs: Pros and Cons
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Jordan Ellis writes for www.dividendinvestor.com and www.stockinvestor.com.
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