6 Inflation-Busting REITs to Buy That Pay 5% or Higher Distributions

Investors receive a 5.38% distribution. The VICI Properties stock price target at Berenberg Bank is $35. The consensus target is slightly higher at $35.52. Shares closed trading on Monday at $26.78.

W.P. Carey

This is a large net lease REIT with an incredible distribution for income investors. 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 are paid a 5.31% distribution. The Wells Fargo price target of $90 compares with the $87.14 consensus figure. W.P. Carey stock ended Monday trading at $79.46 a share.

These six top companies pay dependable distributions above the 5% level. Plus, they are in good sectors like gaming and health care, which are poised to do well in the current difficult times. With the prospect of continued low interest rates for the foreseeable future, and the stock market extremely risky and looking to move into bear market territory, it makes sense to have solid assets like real estate. It is important to remember that REIT distributions can contain return of principal.

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