Investing in real estate investment trusts is a place made in the heavens. The COVID-19 pandemic may have hit the real estate industry, but it has already bounced back in 2021. Real estate investment trusts, popularly known as REITs, are a great investment to add to your portfolio. If you’re looking for a REIT for your portfolio? Want the best REITs Stocks? Then you’re at the right place.
REITs can have different focuses, which makes it difficult to choose your portfolio. There isn’t anything perfect. Therefore, more than one can fit the bill thus allowing you to diversify your portfolio.
Real estate investment trusts have the ability to provide inflation protection, income, and safety. REITs offer you some juicy dividends and provide you with an impressive passive income source. For this reason, we know REITs for their dividends.
If you’re thinking of going for real estate stocks instead of real estate investment trusts. Let’s make things more transparent for you. While there is nothing wrong with holding individual real estate stocks, owning REIT ETFs can often be a better choice. The two major advantages of REITs include instant diversification and professional portfolio management at a very low cost. Moreover, the majority of the REITs pay dividends every month.
STAG Industrial Inc. (STAG)
The first REIT on our list is STAG Industrial Inc. (STAG).
STAG Industrial is a warehouse owner with most of its holdings in the e-commerce business. The company has largely invested in the e-commerce sector. Actually, STAG expanded during the pandemic, acquiring 48 buildings. STAG currently owns around 501 warehouses and over 100 million square feet of leasing space spread across 39 U.S. states.
STAG is currently paying a 3.38% dividend yield and a whopping P/E at 39.27. The company stands tall at around $7 billion in market valuation. Looking at the value of STAG’s underlying value, it has $4.8 billion in assets and a total liability of just over $2 billion. So, there’s $2.8 billion in underlying value. So, STAG is in a pretty sound position as far as cash in hand is concerned.
Why is STAG one of the top investments today in REITs? The answer is simple. The company has the majority of its portfolio in e-commerce. The U.S online retail sales have risen to 13.6%from less than 6% over the past 10 years. Lately, the pandemic has driven online sales. Considering this, STAG has created steady growth from thrust in e-commerce.
Do you know, e-commerce giant, Amazon, is one of the largest tenants of STAG? Yes, the online retail company contributes around 3.9% of rent to STAG. While STAG’s other tenants represent at least 45 different industries.
Adjusted Funds from Operations, also known as adjusted FFO, is a common measure of the financial performance of a REIT. STAG’s adjusted FFO per share increased 10.6% during the June quarter of 2021. And, the company has increased its2021 FFO guidance by roughly 2% to a range of $2.02 to $2.04 per share.
For you guys as investors, here’s the foremost thing. STAG has paid dividends 10 years in a row. This makes it one of the top dividend REIT stocks.
Medical Properties Trust (MPW)
Moving on to the next top dividend REITs, we have Medical Properties Trust (MPW).
Medical Properties Trust(MPW) is a healthcare REIT and has a growing portfolio of hospitals. Following a REIT that is highly invested in e-commerce, we bring you REIT from healthcare. These two are growth sectors with long-term outcomes.
Medical Properties have properties across the U.S., Europe, Australia, and Columbia. Actually, it’s the second-largest owner of hospital beds in the United States.
The company has more than 50 operators that lease their hospital properties on a triple net lease. While 90% of these are on a master lease. This leasing model helps the company in minimizing its REIT’s property-level expenses. This also brings stability in overall operations and increasing the total yield.
2020 brought massive opportunities for the healthcare sector. Medical Properties completed nearly $3.4 billion in acquisitions last year, which helped in increasing the revenue by 46% from 2019. The healthcare REIT is yet to collect the rents from its latest acquisitions. This means that it should generate even more revenue growth in 2021.
As we look at the Medical Properties stock, the company is giving away a dividend yield of 5.20% to its shareholders. This is followed by a 4% dividend increase in February last year, its eight-year streak of annual increases.
SL Green Realty Corporation (SLG)
The last of the top dividend REIT stocks on our list is SL Green Realty Corporation (SLG).
SL Green is a real estate investment trust that primarily invests in office buildings and shopping centers in New York City. It’s one of the high yield monthly REIT stocks in the stock market.
In August, SL Green announced its monthly dividend ordinary dividend of $0.3033 per share of common stock. Currently, SL has a dividend yield of 5.16%. Moreover, SL Green enjoys a robust balance-sheet position and has ample financial flexibility.
SL Green is the largest office REIT in Manhattan. The company owns the real estate space in Manhattan or, we can say, the landlord of Manhattan. SL recently announced the launch of leasing at 7 Dey Street. It’s a 34-story property and will be the neighborhood’s first development built under the Affordable New York Housing Program.
Downtown is one of New York’s most sought-after residential locations. So, 7 Dey provides modern, sophisticated residences that are in high demand and short supply.
The New York REIT has gained 1.4% in the past 6 months and 21.29% so far this year. SL reported an increase in revenue for the second quarter of 2021, beating estimates by $2.09 million. The company’s revenue was around $184.61 million.
So, the overall financials and market growth puts SL Green on the second of the top dividend REITs on our list.