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Hundreds of companies pay dividends, providing plenty of opportunities for people looking for a steadily growing stream of income, and real estate investment trusts (REITs) are a particularly attractive dividend stock choice.
REITs have been under a lot of pressure lately due to rising interest rates negatively impacting real estate values, resulting in falling stock prices and rising dividend yields, allowing investors to earn more income from their assets.
Notable REITs currently recommended for investment include: Agree Real Estate (NYSE:ADC), Extra space for storage (NYSE:EXR), and Rexford Industrial Realty (NYSE:REXR) These stocks offer an opportunity to turn a $250 investment into a nice, growing income stream.
Agree Real Estate
Agree Realty (NYSE:ADC) is a net-lease REIT that focuses on freestanding assets that are net-leased or ground-leased to luxury retail. These tenants are typically not impacted by the financial crisis or e-commerce challenges and generate recurring rental income backed by Agree Realty’s leases.
Agree Realty’s dividend yield is nearly 5% as rising interest rates have caused its stock price to fall. At this yield, investing $250 in Agree Realty would earn you about $12 in annual dividend income. Meanwhile, investing $250 in an S&P 500 index fund would earn you just over $3 in dividend income.
Revenue streams are expected to grow steadily. Over the past decade, the REIT has increased its dividend by 5.6% annually. The increase is driven primarily by the acquisition of additional revenue-generating retail properties. Agree Realty is on track to buy $600 million worth of buildings this year, boosting its adjusted operating cash flow (FFO) by about 4%.
Future purchases present big opportunities: The REIT’s retail partners own roughly 165,000 store locations that could be sold and leased back, giving Agree Realty plenty of room for development.
Extra space for storage
Extra Space Storage, a leading self-storage REIT, regularly sees increased revenue from consumer and business rentals of its self-storage facilities. High demand translates into high occupancy rates, allowing the REIT to regularly raise rental rates.
Extra Space Storage’s current dividend yield of 4.5% is due in part to rising interest rates that have caused its stock price to fall by more than 25%. The REIT has increased its dividend by about 245% over the past decade.
Looking ahead, Extra Space Storage has a strong opportunity to continue growing its dividend. The diversified self-storage sector offers many opportunities for REITs to grow their owned portfolios and industry-leading third-party management systems.
Rexford Industrial Realty
Focused on the Southern California region, Rexford Industrial Realty is an industrial REIT that leases warehouse and distribution facilities to tenants in a variety of industries.
With limited supply and strong demand in Southern California, our deliberate concentration in the region has given us distinct advantages in maintaining high occupancy rates and allowing us to significantly increase rents.
The REIT currently pays a dividend of more than 3.5%, as rising interest rates have pushed its stock price down more than 45% from its high a few years ago. Rexford has raised its dividend by an average of 18% per year over the past five years.
Rexford is poised to continue growing its dividend. In addition to supporting rent increases, the REIT has a track record of making acquisitions that are revenue-accelerating. This year alone, Rexford has acquired approximately $1.4 billion, which is expected to add to its revenue streams.
Over the next three years, the REIT expects net operating income to continue to grow 47% driven by these acquisitions and internal development momentum. Rexford also maintains excellent financial flexibility to fuel continued expansion through additional profitable acquisitions.
Looking for higher yield opportunities?
The current high interest rate environment is creating an excellent opportunity for income-seeking investors to earn huge yields, and not just through dividend stocks… Certain private market real estate investments offer individual investors the opportunity to take advantage of these high-yield opportunities, and Benzinga has identified some of the most attractive options to consider.
For example, the Jeff Bezos-backed investment platform Private Credit Fundprovides access to a pool of short-term loans secured by residential real estate, targeting investors a net annual yield of 7% to 9% per month. The best part is, unlike other private credit funds, The minimum investment in this case is just $100.
Don’t miss out on this opportunity to take advantage of high-yield investments while interest rates are high. Check out Benzinga’s favorite high-yield products.
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This article, “3 Dividend Stocks to Consider with $250 to Invest” originally appeared on Benzinga.com.
