A Big Correction May Be Coming: Goldman Sachs Says Buy High-Dividend REITs Now

Hudson Pacific Properties

With a very solid distribution and solid west coast exposure, this stock works well for those looking to move down the risk ladder now. Hudson Pacific Properties Inc. (NYSE: HPP) has a portfolio of office and studio properties totaling nearly 19 million square feet, including land for development. Focused on premier west coast epicenters of innovation, media and technology, its anchor tenants include Fortune 500 and leading growth companies such as Netflix, Google and Uber.

The REIT signed more than 524,000 square feet of office leases in the first quarter at cash rental rates 2.4% above prior leases. That number was a bit deflated due to some large renewals at market rates and a lease expansion below market rates. After adjusting for those items, cash rent growth was 6.9% on its other leases. As a result of those lease signings, its stabilized portfolio ended the quarter 92.7% leased.

Investors receive a 3.77% distribution. Goldman Sachs has a $35 price target on Hudson Pacific Properties stock, and the consensus target is $28. Tuesday’s closing price was $26.42.

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 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.

Investors receive a 3.90% distribution. The $86 Goldman Sachs price target compares with the lower $75.17 consensus target. Realty Income stock closed at $72.31 on Tuesday.

Simon Property

Commercial real estate has picked up again in a big way, and Simon Property Group Inc. (NYSE: SPG) is a very strong company for investors looking to play the industry. It invests in real estate markets across the globe. It engages in investment, ownership, management and development of properties. The company primarily invests in regional malls, premium outlets, mills and community/lifestyle centers to create its portfolio.