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The stock market has recovered much of its tariff-fueled declines over the past month and a half, but there are still some excellent bargains to be found. That’s especially true if you’re building a portfolio of dividend stocks, many of which are still trading for attractive valuations because of the persistently high-interest-rate environment.
Some of the best dividend opportunities in the market right now can be found in the real estate sector. Here are three industry-leading real estate investment trusts, or REITs (pronounced “reets”) that could be excellent long-term investments for both growth and income right now.
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Realty Income (NYSE: O) owns a massive portfolio of about 15,600 net-lease properties, about three-fourths of which are retail in nature. The REIT focuses on properties that are recession-resistant and aren’t vulnerable to e-commerce disruption, and with tenants signing long-term leases with annual rent increases built in, this is a model built for predictable and growing income over time.
The proof is in the performance. Since it went public 31 years ago, Realty Income has averaged a 13.6% annual total return and has increased its dividend for more than 100 consecutive quarters.
However, Realty Income has underperformed the market in recent years, primarily thanks to the rising-rate environment, which has resulted in an excellent entry point for long-term investors. In fact, Realty Income trades near its lowest price-to-FFO valuation — the REIT equivalent of a P/E ratio, “FFO” being short for “funds from operations” — and with its highest dividend yield (5.8%) since the financial crisis era.
O Dividend Yield data by YCharts
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