Investing

5 High-Yield REITs Are Solid Buys With Huge Inflation and a Risky Stock Market

MGM Growth Properties, together with its joint venture, currently owns a portfolio of properties, consisting of 12 premier destination resorts in Las Vegas and elsewhere across the United States; MGM Northfield Park in Northfield, Ohio; Empire Resort Casino in Yonkers, New York; as well as a retail and entertainment district, The Park, in Las Vegas.

The destination resorts collectively comprised approximately 27,400 hotel rooms, 1.4 million casino square footage, and 2.7 million convention square footage. As a growth-oriented public real estate entity, the company expects its relationship with MGM Resorts and other entertainment providers to attractively position the company for the acquisition of additional properties across the entertainment, hospitality and leisure industries.

Shareholders receive a 5.15% distribution. Deutsche Bank has set a $43 price target on MGM Growth Properties stock. The consensus target is $40.75, near Friday’s close at $40.38 per share.

W.P. Carey

This is a large net lease REIT with an incredible distribution for income buyers. W.P. Carey Inc. (NYSE: WPC) ranks among the largest net lease REITs, with an enterprise value of approximately $18 billion and a diversified portfolio of operationally critical commercial real estate that includes 1,215 net lease properties covering approximately 142 million square feet, as of September 30, 2020.

For nearly five decades, the company has invested in high-quality single-tenant industrial, warehouse, office and retail properties subject to long-term leases with built-in rent escalators. Its portfolio is located primarily in the United States and northern and western Europe, and it is well diversified by tenant, property type, geographic location and tenant industry.

Net lease REITs generally rent properties with long-term leases (10 to 25 years) to high credit-quality tenants, usually in the retail and restaurant spaces. “Net lease” refers to the triple-net lease structure, whereby tenants pay all expenses related to property management: property taxes, insurance and maintenance.

Investors receive a 5.47% distribution. The Wells Fargo price target of $90 is greater than the $86 consensus target. The shares closed most recently at $76.99 apiece.


These five top REITs pay dependable distributions above the 5% level. With the prospect of continued low interest rates for the foreseeable future, and the stock market extremely risky and overbought, it makes sense to have solid assets like real estate in your portfolio. However, it is important to remember that REIT distributions can contain return of principal.

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