There is an old adage among real estate investors that basically says you can’t make or create any more land. While you can always build higher, you still need to own the land. One of the best assets that most investors are underweighted on is real estate. While those who own a home are technically real estate investors, homeownership doesn’t produce any income, unless you have rental homes. That can be very capital intensive, not to mention time-consuming.
We screened our 24/7 Wall St. real estate investment trust (REIT) universe looking for the highest yielding ones that are publicly traded. It should be noted that REITs can be very vulnerable to sharp rises in interest rates. However, many across Wall Street feel that the Federal Reserve will not begin raising the federal funds rate from the current 0.25% level until, at the earliest, next summer and likely not until 2023.
Most importantly, hard assets like real estate tend to be solid holdings with rising inflation, and despite the denials from Washington, there is a good chance that the current inflationary trends will extend well into next year and possibly longer. Plus, with the potential for a sharp correction always looming, these top companies are a safe place to be now.
We found six top companies that all pay a 4.90% or higher distribution and are rated Buy at top Wall Street firms. It’s important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
This company recently announced it is increasing the distribution for the fourth quarter. Gladstone Commercial Corp. (NASDAQ: GOOD) is focused on acquiring, owning and operating net leased industrial and office properties across the United States.
As of June 30, 2021, Gladstone owns a diversified portfolio of 121 office and industrial properties located in 27 states and leased to 106 tenants. The company has grown the portfolio in a consistent, disciplined manner at a rate of 18% per year since the initial public offering in 2003. It matches long-term leased properties with long-term debt to lock in the spread to create a durable, stable cash flow stream to fund monthly distributions to shareholders. Current occupancy stands at 96.5%, and occupancy has never dipped below 95.0% since the IPO.
Most importantly for investors, Gladstone has a track record of success, as exhibited by a history of strong distribution yields, that occupancy rate and over 10 years of paying continuous monthly cash distributions.
Investors receive a 6.59% distribution. Aegis has a Wall Street high $26 price target, and the consensus target is $25.00. The last trade for Thursday was reported at $22.80 a share.