Top REITs for Income and Growth in 2024
In the first half of 2024, Real Estate Investment Trusts (REITs) underperformed as markets delayed their expectations for Federal Reserve interest rate cuts. As we move into the third quarter, real estate is the only negative sector year-to-date. With markets now anticipating a potential rate cut this year, U.S. REITs were trading at an average 16.5% discount to net asset value (NAV) by the end of May, offering higher effective yields for investors.
The article highlights three "Strong Buy" REITs:
- Agree Realty Corporation (ADC): A retail-focused REIT with a strong portfolio and reliable dividends. Despite a slight decrease in stock value, ADC offers an annual dividend yield of 4.84% and has recently raised $450 million through senior unsecured notes. Analysts predict a 7.3% upside potential.
- Equinix Inc. (EQIX): Specializes in digital infrastructure and data centers. Despite a recent stock dip due to a short seller report, Equinix rebounded with strong Q1 earnings and has strategic partnerships to enhance its offerings. Analysts forecast an 18.9% upside potential.
- American Tower Corporation (AMT): Manages over 224,000 communication sites globally and has consistently increased dividends for 11 years. AMT’s strategic debt management and strong Q1 performance position it well for growth, with analysts suggesting a 17.6% upside potential.
Overall, ADC, EQIX, and AMT present compelling investment opportunities within the REIT sector, offering steady dividend payouts and strong growth potential.