It has been 18 long months of interest rate hikes, but it is becoming clear that, while painful, the Federal Reserve’s rate hike campaign is working. The good news for investors is that though the Fed probably will not announce a rate hike this week, it is likely it will raise it by 25 basis points once more before the year is out. That could very well be the end of this rate hike cycle. The Fed could just hold rates at the current 5.25% to 5.50% well into next year if the inflation rate moderates further.
Given this, one great investment idea now is real estate investment trusts. REITs are a very practical way to own commercial and residential real estate, and many pay among the best dividends of any asset class. However, most only pay quarterly, or four times a year, so there are at least 90 days between dividends. Since most Americans receive bills that need to be paid monthly, we decided to screen our 24/7 REIT research universe for Buy-rated companies that pay monthly dividends. We found seven that make sense for passive income investors looking for dependable distributions and a degree of safety.
For contrarian investors, REITs may be at the biggest discount in years, after a year and a half of interest rate hikes. While selection is always very important, as this year’s bank issues could crimp lending, the top companies will survive and offer huge total return potential.
It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Agree Realty
This top REIT has had a nice run off the lows printed earlier this year and still has potential upside. Agree Realty Corp. (NYSE: ADC) focuses on the ownership, development, acquisition and management of retail properties net leased to national tenants. It specializes in acquiring and developing net-leased retail properties for retail tenants.
The company specializes in the acquisition and development of properties net leased to industry-leading, omnichannel retail tenants. As of December 31, 2022, it owned and operated a portfolio of 1,839 properties, located in all 48 continental states and containing approximately 38.1 million square feet of gross leasable area.
Investors receive a 4.94% distribution. Truist Financial has a $74 target price on Agree Realty stock. The consensus target is $74.58. The stock closed on Tuesday at $58.74.
Apple Hospitality REIT
While not affiliated with the technology giant, this company offers solid total return potential. Apple Hospitality REIT Inc. (NYSE: APLE) owns one of the largest and most diverse portfolios of upscale, rooms-focused hotels in the United States.
Its portfolio consists of 220 hotels with more than 28,900 guest rooms located in 87 markets throughout 37 states, as well as one property leased to third parties. Concentrated with industry-leading brands, the company’s hotel portfolio consists of 97 Marriott-branded hotels, 119 Hilton-branded hotels and four Hyatt-branded hotels.
Apple Hospitality REIT stock comes with a 5.97% distribution. The $18 B. Riley Securities target price is the same as the consensus figure. The closing share price on Tuesday was $15.98.
Sponsored: Tips for Investing
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Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.
