Most investors were thrilled to see 2022 come to an end, as it was one of the worst years for stocks since the turn of the century. Rising interest rates (which once again moved higher in December and are likely to go higher later this month with another 50- or 25-basis-point hike) have been one of the major headwinds for stocks. It has been especially difficult for real estate investment trusts (REITs), some of which are very vulnerable to rising rates.
The good news is the rate increases are close to being complete, after December’s hike pushed the federal funds rate to 4.25% to 4.50%. Given that the expected terminal rate is 5.00% to 5.25%, the Federal Reserve seems close to being done. That bodes well for REITs, especially those that are not as exposed to rate increases.
We screened our 24/7 Wall St. REIT universe looking for companies that paid big dividends but were not as affected by rising rates or a slowing economy. Top companies in gaming, apartments, document storage and other areas offer a degree of safety and reliable dividends. We found five stocks that are rated Buy across Wall Street for growth and income investors to consider. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Apartment Income REIT
The name says it all here, and this big-dividend stock is a great idea for those seeking higher income with growth potential. Apartment Income REIT Corp. (NYSE: AIRC) is focused on the ownership and management of quality apartment communities located in the largest markets in the United States.
This REIT is one of the country’s largest owners and operators of apartments, with 74 communities in 11 states and the District of Columbia. As of September 30, 2022, it held unencumbered apartment communities with an estimated fair market value of approximately $8.3 billion, almost triple the amount from December 31, 2020.
Investors receive a 5.25% distribution. The Goldman Sachs target price is $43, while the consensus target is $41.00. The stock closed almost 4% higher on Wednesday at $36.16.
Gaming and Leisure
This stock is a unique and interesting way to play the gaming sector and generate income. Gaming and Leisure Properties Inc. (NASDAQ: GLPI) is engaged in the business of acquiring, financing and owning real estate property to be leased to gaming operators in triple-net lease arrangements.
Sponsored: Tips for Investing
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Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.