JoshReal Estate Investment Trusts, or REITs, provide investors with a steady consistent source of revenue in today’s increasingly volatile economic climate, where global trade tensions are simmering, tweets move markets and the next recession looms just on the horizon. REITs are corporations that are legally mandated to hold 75-percent of their assets as real estate and distribute 90-percent of their profits to shareholders in the form of dividends. REITs offer investors a great way to passively unlock profits in the real estate market by renting, leasing and selling properties in a diverse range of industries such as residential, commercial, hospitality, data center, and healthcare. Here is a list of the four best REITs to invest in for today’s uncertain volatile market.
1.) Vanguard Real Estate ETF: VNQ Dividend Yield: 3.4 %
The first name on the list technically isn’t even a REIT, but Vanguard’s Real Estate ETF fund. Ticker symbol VNQ represents the largest of all REIT dedicated ETF funds. With a market cap of just shy of $70 billion dollars, VNQ provides a great entry-level, income-generating vehicle for newcomers to the sector, as well as investors looking for multifaceted diversification along with Vanguard’s trademark wealth management expertise. With robust year-to-date returns over 28-percent, combined with a surprisingly low 0.12-percent net expense ratio, VNQ seamlessly blends proven income-producing performance with tremendous overall value.
2.) The Realty Income Corporation: O Dividend Yield: 3.5 %
The Realty Income Corporation commercial retail REIT commonly referred to as the monthly dividend company because of its ultra-reliable 591 months of consecutive dividend payments. Ticker symbol O has increased its shareholder dividend payout for 88 straight quarters, including during the 2008 Great Recession. O’s massive commercial real estate empires span nearly 6000 retail locations in 49 States, including the United Kingdom and Puerto Rico, catering to a diverse group of non-discretionary retail conglomerates, most notably Walmart, Kroger, 7 Eleven and Walgreens, just to name a few. The current dividend yield sits at about 3.5-percent annually, after recently falling due to the company’s stock price rallying over 60-percent the last 18 months. Nevertheless O’s 16.8-percent average annual return rate, since its IPO in 1994, nearly doubles the S&P 500’s 9.8-percent average annual gains in that same time span.
3.} American Tower: AMT Dividend Yield: 2 %
No company is better positioned to cash in on the impending 5G Revolution than the American Tower Corporation, ticker symbol AMT, the largest cellular antenna tower REIT on the market, with a valuation of over $101 billion dollars. AMT’s global network of cell towers and related infrastructure spans over 170,000 sites in 16 different countries and continues to grow due to skyrocketing demand for data fueled by memory-intensive applications like 4k streaming video and cloud services, along with photo and video sharing social media sites. With mobile data usage already doubling on a yearly basis, that number is forecasted to increase ten-fold by 2022 with the official rollout of the nationwide 5G data network. Analysts at the global financial service firm KPMG estimate the economic impact of the 5G Revolution to be in the $4.2 trillion dollar range. AMT’s stock price is already up over 50-percent year-to-date; that positive momentum combined with a very healthy 3.31 EPS and a highly sustainable reoccurring lease income business model, has the cell tower behemoth poised to provide its shareholder with a quality source of dividend income as well as outstanding growth potential for years to come.
4.} Apple Hospitality: APLE Dividend Yield: 7.7 %
With a real estate portfolio featuring 235 hotels, including more than 30,000 guest rooms and spanning 34 states, Apple Hospitality, the largest limited service, lodging focused REIT on the market, provides shareholders an outstanding 7.7-percent dividend yield, paid out on a monthly basis. Most APLE’s holdings are concentrated on the mid-level, minimal service segment of the hotel industry, focusing on well-recognized brands like Hilton, Hyatt, and Marriott; providing the company with the most insulation possible against any potential economic downturns in the industry. In its most recent quarterly earnings release, APLE delivered on $329.68 million dollars total revenue with and an EPS of $0.27, along with a below-industry-average $1.6 billion dollars of overall debt.
Honorable Mention
• Iron Mountain: IRM – Data center security REIT that provides great dividend income, as well as growth investment opportunity due to the rapidly approaching 5G Revolution and growing global demand for data privacy.
• Essex Property Trust Inc.: ESS – A residential REIT concentrating primarily on upscale apartment buildings on the West Coast of the United States, most notably the highly lucrative Southern California, Northern California, and Seattle markets.