Real estate investment trusts are a popular way for income investors to play the stock market. The best REITs to buy for income and growth provide both a solid dividend payment and consistent returns.
But in recent years, investing in REITs hasn't been the slam-dunk choice as in years past. The Covid-19 pandemic brutalized office REITs and some retail REITs. High interest rates make residential REITs more of a challenge.
But one of the best things about searching out the best REITs to buy is there are a variety of choices. If you want to avoid office or residential REITs, you can turn to healthcare REITs. If commercial REITs to buy make you nervous, look at those focusing on industrial properties rather than shopping malls.
Industrial REITs also handle warehouses, distribution centers and logistics facilities.
And because of the unit tax structure that requires REITs to return 90% of their profits to shareholders, the best REITs to buy are reliable income generators.
I suggest using the Portfolio Grader as your guide to find the top income-generating REITs. Here are seven top REITs for a steady income that are worth look today.
Urstadt Biddle Properties (UBA)
Real estate investment trust (REIT) on a black notebook on an office desk.
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Connecticut-based Urstadt Biddle Properties (NYSE:UBA) is a retail REIT that deals primarily in shopping centers in Connecticut, New York and New Jersey. The company focuses on the New York City area, with properties as far west as Providence, New Jersey, and as far north as Kingston, New York.
Urstadt Biddle is seeking to grow its portfolio, focusing on shopping centers anchored by grocery stores in neighborhoods or community shopping centers. The focus on grocery-based properties makes sense. Groceries have done comparatively well in the higher inflation environment.
But you won't be able to buy UBA stock for long. Urstadt has a deal to be acquired by Regency Centers Corp. (NASDAQ:REG) in an all-stock deal valued at $1.4 billion. The deal values UBA stock at $20.40 per share and should close in the third or fourth quarter of 2023.
Until then, you can expect Urstadt Biddle to continue to bring in profits. The REIT currently pays a dividend yield of 5.2% and has a "B" rating in the Portfolio Grader.
Life Storage (LSI)
Life Storage (LSI) sign on the side of one of its facilities in Illinois.
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Self-storage is a growing business. As people live longer and downsize their possessions, they often turn to self-storage to keep their belongings. More than 51,000 self-storage units are in the U.S., bringing in annual revenue of $29 billion.
Self-storage is a pretty profitable storage model. Companies can just auction off the contents if a customer stops paying the monthly bill.
Life Storage (NYSE:LSI) is a New York-based storage REIT with a significant piece of the business. Life Storage claims to have more than 1,100 storage units scattered across 37 states.
Earnings in the first quarter were $273.6 million, beating analysts' estimates of $264.47 million. Earnings per share of 96 cents missed expectations of $1.04 per share.
LSI stock provides a dividend yield of 3.7% and has a "B" rating in the Portfolio Grader.
VICI Properties (VICI)
Person holding mobile phone with logo of American real estate company Vici Properties Inc. on screen in front of web page. VICI stock.
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I'm not sure if you should feel you're gambling when you're considering VICI Properties (NYSE:VICI). On the one hand, this real estate investment trust focuses on destination resorts, casinos and hospitality. So you're literally betting on casinos.
But on the other hand, VICI appears to be a pretty safe wager. It has significant ownership in the Las Vegas strip, including some of the most well-known casinos, such as Caesars Palace and the Venetian Resort.
VICI generates as much as 45% of its total revenue from Las Vegas. And revenues in Las Vegas are soaring—according to state gaming officials, Las Vegas took in $8.2 billion in gaming revenue in 2022, a 17% increase from 2021.
VICI revenue in the first quarter reached $877.6 million, up $110% yearly as Las Vegas roared back from the coronavirus closures.
VICI stock pays a dividend yield of 5.1%, and currently has a "B" rating in the Portfolio Grader.
Essential Properties Realty Trust (EPRT)
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Essential Properties Realty Trust (NYSE:EPRT) is a different flavor of REIT. The company primarily works with single-tenant properties rather than shopping malls or shopping centers.
Its tenants include convenience stores, restaurants, medical facilities and automotive service centers. It has more than 1,600 properties in 48 states.
Essential Properties reported earnings of $83.69 million in the first quarter, an increase of 19.35% from a year ago. Earnings also beat analysts' expectations on the top and bottom lines, with EPS of 26 cents while analysts expected EPS of 22 cents. The stock is up 17% since October.
On top of that, EPRT stock provides a dividend yield of 4.6%. It has a "B" rating in the Portfolio Grader.
Iron Mountain (IRM)
Iron Mountain (IRM) logo on truck
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Iron Mountain (NYSE:IRM) is a Boston-based information management and storage systems company. But it's also classified as a REIT for tax purposes, so it also qualifies for this listing.
Iron Mountain has more than 225,000 global customers, and its facilities stores items such as documents, collectibles or artifacts. It also has more than a dozen data centers it leases to customers who need to store and transmit their data.
The storage rental business is quickly growing – in the first quarter, it earned $810 million from that segment, an increase of nearly 8% in a year. Its other business, meanwhile, showed only a 1.4% year-over-year increase.
IRM stock has a 4.6% dividend yield and currently has a "B" rating in the Portfolio Grader.
Equinix (EQIX)
corporate building with Equinix (EQIX) logo on it
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Equinix (NASDAQ:EQIX) is a REIT to buy if you like investing in computers and technology. The company is a data center provider that provides customers with cloud services, networking, storage and software.
As the world's largest digital infrastructure company, Equinix provides access to more than 2,100 network services, more than 3,000 cloud and IT services, and more than 4,800 enterprise services.
The company also has a long record of growth, having seen quarterly growth for more than 17 consecutive years—more than 70 quarters in a row.
Earnings for the first quarter of 2023 were $2 billion or a jump of 15% from a year ago. Earnings per share came in at $2.77, a 99% increase from a year ago.
EQIX stock has a smaller dividend yield of only 1.9%, but the track record of growth makes up for it. It gets a "B" rating in the Portfolio Grader.
CareTrust REIT (CTRE)
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Healthcare REITs are appealing because as we're getting older. Back in 1900, life expectancy in the U.S. was only 47; by 2021, it's all the way to 76. And many people live into their 80s, 90s and even longer.
The aging population means there will be a continuous need for healthcare facilities and all they entail. As you look at healthcare REITs, CareTrust REIT (NASDAQ:CTRE) is one of the better ones you can buy.
CareTrust owns more than 200 facilities in 24 states, with 75% of holdings being skilled nursing facilities. It also maintains some assisted living facilities and a single independent living facility.
Earnings for the first quarter included revenue of $50.6 million, an increase of 8.8% from the previous year. Earnings were $19.2 million versus a loss of $43.2 million in the first quarter of 2022. The company posted earnings per share of 19 cents and increased the dividend to half a cent, from 27.5 cents to 28 cents per share.
That helps push CareTrust's dividend yield to 6%, helping it get a "B" rating in the Portfolio Grader.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
