Top REITs to Buy Amid Market Volatility and High Yields

Investors are eyeing dividend stocks like Realty Income, Rexford Industrial, and Mid-America Apartment Communities as opportunities for income and growth. Recent sell-offs have enhanced yields for these REITs, potentially offering strong total returns moving forward.

Date: 24-12-2024

AI Rating: 7

The report highlights the appeal of dividend-paying stocks, particularly real estate investment trusts (REITs) like Realty Income, Rexford Industrial, and Mid-America Apartment Communities. These stocks are being emphasized for their high dividend yields and potential for growth despite recent declines in stock prices.

Realty Income (NYSE: O)

Realty Income has faced a decline of over 15% from its peak, pushing its dividend yield above 6%. This yield significantly surpasses the S&P 500's yield of about 1.2%. The REIT benefits from a diversified portfolio, including properties leased to major companies, providing stable rental income. Realty Income conservatively distributes about 75% of its adjusted funds from operations as dividends, indicating a strong capacity to maintain and potentially increase dividends, given its solid balance sheet.

Rexford Industrial (NYSE: REXR)

Rexford Industrial has experienced a substantial slump of over 30% this year, resulting in a dividend yield of 4.4%. The report notes a slowdown in the Southern California industrial market, yet the demand remains robust, underpinning strong rent growth. The REIT is expected to generate an incremental $72 million in net operating income over the next three years, supported by high demand and upcoming lease increases. This provides a favorable outlook for its dividend growth, given its impressive 18% compounded annual dividend growth over recent years.

Mid-America Apartment Communities (NYSE: MAA)

Mid-America has also seen its stock decline by nearly 10%, increasing its dividend yield to around 4%. The company faces supply issues affecting rent growth but foresees a promising trend starting in 2025 as new supply diminishes. With plans for nearly $1 billion in apartment development and the financial capacity to expand, this REIT shows strong potential for continuing dividend increases, having done so for 15 consecutive years.

Overall, these REITs are gaining attention due to their high dividend yields derived from recent market sell-offs, along with strong prospects for growth, making them attractive options for income-focused investors.

Stocks: O REXR MAA