Despite the signs of an impending recession threatening to make investors queasy, measures can still be taken to protect one’s portfolio and minimize potential financial losses. One such investment is a real estate investment trust (or REIT), providing a much-needed income stream and acting as a cushion against the economic downturn. As we prepare for the conditions of an inverted yield curve, many investors feel safer diversifying their portfolios by investing in REITs to buy for growth and dividends.
REIT dividends are especially attractive for investors looking for income, particularly during periods of high inflation. Moreover, it offers security to limit downside risk while acting as a hedge against inflation. This makes investing in REITs a smart choice if you’re seeking an income stream with room to increase returns when the market and economy hold firm again. Having said that, let’s look at seven of the top REITs to buy for growth and dividends
Medical Properties Trust
Innovative Industrial Properties
National Storage Affiliates Trust
Alpine Income Property Trust
Global Net Lease
Office Properties Income Trust
Medical Properties Trust (MPW)
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Medical Properties Trust (NYSE:MPW) has gone from strength to strength to become one of the world’s leading owners of hospital real estate. Its incredible portfolio showcases 447 facilities and 44,000 beds across 10 countries on four continents, making it a perfect option for investors seeking profitable opportunities in this sector. More importantly, MPW’s current dividend yield stands at an impressive 8.5%, with 10 years of dividend growth. With such impressive figures, Medical Properties is an excellent choice for those keen to benefit from hospital-related real estate.
Medical Properties is a cause for celebration for many investors, as the company recently announced its intention to pursue a $500 million buyback program. The program clearly indicates the firm’s ability to generate sizable profits and repurpose them for shareholder appreciation. It’s a win-win situation that should encourage both short and long-term expansion.
Innovative Industrial Properties (IIPR)
Innovative Industrial Properties (NYSE:IIPR) has been an incredible success story, becoming one of the biggest players in the cannabis sphere. IIPR has established itself as a dependable partner assisting cannabis operators throughout the United States, regardless of their size. It owns 111 properties with a total rentable square footage of 8.7 million, providing a platform for state-licensed cannabis operators to thrive and grow their businesses.
IIPR reported stellar third-quarter results in November, which came ahead of analyst estimates across both lines. Revenues surged over 32%, while net income improved by 25% to $37.3 million. However, despite its consistent performances, and a dividend yield of over 7%, IIPR stock is down over 50% from last year, which makes it a highly attractive bet at current prices.
National Storage Affiliates Trust (NSA)
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National Storage Affiliates Trust (NYSE:NSA) is another leading REIT that continues to show exponential growth in the self-storage niche. It boasts a robust core strategy focusing on highly populated metropolitan areas of the United States with state-of-the-art facilities. So far, NSA operates over 1,100 properties spanning 42 states and Puerto Rico. Additionally, its presence covers an impressive 71.5 million rentable square feet making the REIT the sixth-largest self-storage operator in the country.
With such a robust portfolio of properties, NSA remains at the forefront of innovation in the industry, and its growth shows no signs of slowing down anytime soon. Moreover, its industry-leading fundamentals are marked by a tremendous expansion in same-store sales and funds from operations growth over the past five years. Also, the stock trades at a hefty discount to its 5-year average and its peers, adding to its bull case.
Alpine Income Property Trust (PINE)
Alpine Income Property Trust (NYSE:PINE) is one of the top micro-cap triple-net lease REITs with a diverse range of rental occupiers across its retail properties. With 149 properties spread across 35 states, their total portfolio boasts 3.7 million square feet and is at 100% occupancy. Moreover, it boasts some of the biggest names in business, such as 7-Eleven, Lowe’s (NYSE:LOW), and others.
In a relatively short time, the REIT has built an attractive dividend history yielding roughly 5.6%. Moreover, its dividend payouts are well-covered, with its free cash flows surging over 38% over the past five years. Additionally, 53% of its total annualized base rent comes from investment-grade rated tenants, making the stock a stable and secure option for those looking for reliable income.
Global Net Lease (GNL)
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Global Net Lease (NYSE:GNL). is a top REIT focusing on premium office and industrial properties coupled with its strong tenant base makes for undeniable attractiveness. This is further backed up by the impressive occupancy levels and longer lease terms, creating a secure environment that provides steady earnings over time.
The diversity of its massive reputable client base makes it one of the more secure income stocks. Most of its businesses are conducted through long-term agreements, and its properties are occupied all the time virtually. Though its investors might question the consistency of dividend payouts, its colossal yield of over 11% effectively dampens those concerns.
Realty Income (O)
Realty Income (NYSE:O) is a blue-chip REIT, particularly considering its high yield and triple net lease business model with investment-grade credit ratings. It offers a monthly dividend and boasts a strong credit rating with a track record that is second to none. Moreover, it’s a dividend aristocrat, having raised its payouts over the past 26 consecutive years. Also, its total return over the past decade is over 140%.
Realty Income has a real competitive edge due to its eCommerce-resistant business. Its portfolio focuses on essential services such as groceries, hardware stores, and pharmacies which is unlikely to be hampered too much by eCommerce stalwarts like Amazon (NASDAQ:AMZN). Therefore, it is likely to continue growing at its lofty pace for the foreseeable future.
Office Properties Income Trust (OPI)
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Office Properties Income Trust (NASDAQ:OPI) is a leader in the office REIT space, boasting an impressive 162 properties across the U.S. OPI stands apart from its competition by taking pride in leasing its offices to prestigious tenants, with the U.S. government being its highest-rated tenant.
Having the government as one of the top tenants gives OPI a major competitive advantage. Not only is the government unlikely to default on its obligations, but it also provides stability and reliable cash flow with long-term contracts typically lasting around a decade. Furthermore, current occupancy levels stand at an impressive 90%, making any renewal risk highly improbable. More importantly, it offers a staggering dividend yield of 13%.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.
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