It’s been 16 long months of interest rate hikes, but with both the consumer price index and the producer price index numbers coming in better than expected this week, it’s becoming clear that while painful, the Federal Reserves rate hike campaign is working. The good news for investors is that while it’s likely they raise 25 basis points yet again at the meeting in late July, that could be the end of this rate hike cycle. With that noted, they could hold rates at 5.25%-5.50% or even higher well into next year.
One great idea now, especially with the Federal Reserve closing in on the end of the rate hikes, is real estate investment trusts or REITs, a very practical way to own commercial and residential real estate, and many pay among the best dividends of any asset class. However, most only pay quarterly, or four times a year, so there is a wait of at least 90 days between dividends.
Since most Americans receive bills that need to be paid monthly, we decided to screen our 24/7 REIT research universe for Buy rated companies that pay monthly dividends, and we found seven that make sense for income investors looking for dependable distributions and a degree of safety.
For contrarian investors, REITs are still trading at some of the biggest discounts in years after the long string of interest rate hikes, and while selection is very important, as the current bank issues could crimp lending due to concerns with commercial real estate, the top companies will survive and offer huge total return potential. It’s important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
This top REIT has had a nice run off the lows printed earlier this year and still has potential upside. Agree Realty Corporation (NYSE: ADC) focuses on the ownership, development, acquisition, and management of retail properties net leased to national tenants. It specializes in acquiring and developing net leased retail properties for retail tenants.
Agree Realty specializes in the acquisition and development of properties net leased to industry-leading, omni-channel retail tenants. As of December 31, 2022, the Company owned and operated a portfolio of 1,839 properties, located in all 48 continental states and containing approximately 38.1 million square feet of gross leasable area.
Investors are paid a 4.45% distribution. Raymond James has a Strong Buy rating to go with an $81 target price objective. The Wall Street consensus target is set at $76. The stock closed Thursday at $65.56.
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