5 Highest-Yielding REITs to Start 2022 With Big Dividends and Inflation Protection

An adage among real estate investors basically says, “You can’t make or create any more land.” Though you can always build higher, you still need the land. One of the best assets, and one that most investors are underweighted in, is real estate. Those that own a home are technically real estate investors, but home ownership does not produce any income, aside from rental homes, which can be very capital intensive and time consuming.

We screened our 24/7 Wall St. real estate investment trust (REIT) universe looking for the highest-yielding ones that are publicly traded. Note that REITs can be very vulnerable to spikes in interest rates. Many across Wall Street feel that the Federal Reserve will begin raising the federal funds rate from the current level near zero in 2022. Yet, even with three 0.25% increases in 2022 and 2023, we are still looking at a rate in the 1.5% to 1.75% range at the end of 2023. From a historical standpoint, that is still extremely low.

These five top REITs all pay a 4.5% or higher distribution and are rated Buy at top Wall Street firms. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Gladstone Commercial

This company recently announced a distribution increase for the fourth quarter. Gladstone Commercial Corp. (NASDAQ: GOOD) is focused on acquiring, owning and operating net leased industrial and office properties across the United States.

As of June 30, 2021, Gladstone owns a diversified portfolio of 121 office and industrial properties located in 27 states and leased to 106 tenants. The company has grown the portfolio in a consistent, disciplined manner at a rate of 18% per year since the initial public offering in 2003. It matches long-term leased properties with long-term debt to lock in the spread to create a durable, stable cash flow stream to fund monthly distributions to shareholders. Current occupancy stands at 96.5%, and occupancy has never dipped below 95.0% since 2003.

Most importantly for investors, Gladstone has a track record of success, as exhibited by a history of strong distribution yields, consistent occupancy greater than 95%, and more than 10 years of paying continuous monthly cash distributions.

Investors receive a 5.83% distribution. Aegis has a Wall Street high $26 price target, which may be going higher soon. The consensus target is $25.00, and the last trade for Friday was reported at $25.77.

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