5 Defensive Stocks to Buy Now for the Massive Surge of Inflation

Realty Income

This is an ideal stock for growth and income investors looking for a safer idea for the rest of 2021. Realty Income Corp. (NYSE: O) is an S&P 500 company dedicated to providing stockholders with dependable monthly income. The company is structured as a real estate investment trust (REIT), and its monthly dividends are supported by the cash flow from over 6,500 real estate properties owned under long-term lease agreements with commercial tenants.

To date, the company has declared 604 consecutive common stock monthly dividends throughout its 51-year operating history and increased the dividend 108 times since its public listing in 1994, and it is a member of the S&P 500 Dividend Aristocrats index.

Investors receive a 4.36% distribution. BofA Securities has set its price objective at $74. The $71.79 consensus target for Realty Income stock also compares with a $64.74 close on Wednesday.

VICI Properties

This is a top real estate pick across Wall Street in the net lease group, and it is an ideal stock for investors who are more conservative. VICI Properties Inc. (NYSE: VICI) is a triple net lease real estate investment trust (REIT) that was spun out of Caesars Entertainment post-bankruptcy.

The company has 23 mixed-use gaming, lodging and entertainment properties in its portfolio, and a subsidiary that owns four championship golf courses. VICI also owns roughly 34 acres of undeveloped land in Las Vegas, which it leases to Caesars.

BofA Securities feels the company will continue to benefit from strong external growth and a further consolidating gaming landscape:

Much of the focus for VICI was on its recent deal to acquire the real estate of the Venetian Resort in Las Vegas with Apollo as a new tenant. Looking ahead, we are positive on VICI’s embedded growth pipeline with Caesars Entertainment including a put/call on the Centaur properties in Indiana (starting in Jan. 2022) and a right of first refusal on a Strip Asset sale for Caesars which could occur soon after a full EBITDAR recovery.

Investors receive a 4.45% distribution. The BofA Securities price target is $36. The consensus target is $33.42. VICI Properties stock closed at $29.65 after a pullback of over 3% on Wednesday.

Another smart idea for conservative investors are Treasury inflation-protected securities (TIPS), which are a type of Treasury security issued by the U.S. government. TIPS are indexed to inflation in order to protect investors from a decline in the purchasing power of their money. As inflation rises, TIPS adjust in price to maintain their real value. Blackrock has an exchange-traded fund called the IShares TIPS Bond ETF (NYSE: TIP) that yields 1.35% currently and is a great way for investors to own the bonds without having to buy individual securities.

The bottom line is that inflation, whether transitory or not, appears to be here, at least for now. It may be a good time to sell some profitable momentum or technology stocks and move the proceeds to these conservative ideas, some of which pay very large and dependable distributions and dividends.