Piedmont Office Realty
While way off the REIT radar, this high-yielding idea is a strong play for more aggressive investors. Piedmont Office Realty Trust Inc. (NYSE: PDM) is an owner, manager, developer, redeveloper and operator of high-quality Class A office properties located primarily in select submarkets within seven major eastern U.S. office markets. The majority of its revenue is generated from the Sunbelt. Its geographically diversified, approximately $5 billion portfolio currently encompasses approximately 17 million square feet.
The company is a fully-integrated, self-managed REIT with local management offices in each of its markets and is investment-grade rated by S&P Global Ratings (BBB) and Moody’s (Baa2). At the end of the third quarter, approximately 63% of the company’s portfolio was Energy Star certified and approximately 41% was LEED certified.
This one offers an 8.39% distribution. The Truist Securities price target of $17 is well above the $13.67 consensus target and Thursday’s closing print of $9.83.
VICI Properties
This is the top pick across Wall Street in the net lease group, and it is an ideal pick for investors who are more conservative and looking for gaming exposure. VICI Properties Inc. (NYSE: VICI) is a triple net lease REIT that was spun out of Caesars Entertainment post-bankruptcy. It has 23 mixed-use gaming, lodging and entertainment properties in its portfolio, and a subsidiary that owns four championship golf courses. The company also owns roughly 34 acres of undeveloped land in Las Vegas, which it leases to Caesars.
Much of the focus has been on VICI’s acquisition of the real estate of the Venetian Resort in Las Vegas, with Apollo as a new tenant. Looking ahead, many on Wall Street are very positive on VICI’s embedded growth pipeline with Caesars Entertainment, including a put/call on the Centaur properties in Indiana (starting in January) and a right of first refusal on a strip asset sale for Caesars, which could occur soon after a full earnings before interest, taxes, depreciation, amortization and restructuring or rent costs recovery.
In addition, the company closed a $17.2 billion deal last April to buy out rival gaming REIT MGM Growth Properties, which owns the real estate of 15 casinos and resorts in eight states, including seven properties on the Las Vegas Strip. All of MGM Growth’s properties are operated by MGM Resorts International.
VICI Properties stock comes with a 4.77% distribution. Truist Securities’ $35 target price is less than the $37.88 consensus target. Shares closed at $33.18 on Thursday.
These top stocks have been hit by the move higher in interest rates and the large-scale selling all across Wall Street over the past year. They are all leaders in their specific REIT subsectors and offer multiple ways for investors to get steady growth, own hard assets and be paid substantial and dependable income.
Originally published at 24/7 Wall St.
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