Dividend Stocks

Real estate investment trusts (REITs) are companies that own properties or invest in mortgages. They offer excellent opportunities for investment as they pay dividends, providing a steady stream of income on a portfolio.

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According to Yieldstreet, “REITs give investors the option of investing in real estate without the expense of purchasing and maintaining an actual property. REITs generally have wider diversification, lower risk factors, and potential appreciation so they may be potentially beneficial additions to an equity or fixed-income portfolio.”

REITs to choose from, so here are some of the best ones to consider investing in now.

REITs: American Tower (AMT)

When you think about owning property, cell phone towers probably don’t come to mind. However, as 5G rolls out, a REIT that owns cellular towers will be a great investment. American Tower (NYSE:AMT) owns 187,000 cell towers, including 43,000 in the U.S. and Canada. The company can increase profits by adding more tenants for each tower.

American Tower has also been growing through acquisitions. The company expanded into Canada last year by acquiring InSite Wireless Group, which owned 3,000 communication sites across the U.S. and Canada. American Tower also bought Telxius Towers, which will make it one of the largest tower companies in Europe with 31,000 sites.

Although the company’s forward dividend yield is small at 1.9%, American Tower has been increasing its dividends steadily over the years. It paid just 21 cents per share in the first quarter of 2012, but that dividend is now up to $1.27 per share.

Americold (COLD)

Americold (NYSE:COLD) owns 238 temperature-controlled warehouses in North America, Europe, Australia and South America. It did exceptionally well this past year because of the eat-at-home trend brought on by Covid-19. Among Americold’s over 2,600 customers are big names like Kroger (NYSE:KR), Albertsons Companies’ (NYSE:ACI) Safeway, Kraft Heinz Co. (NASDAQ:KHC) and Conagra Brands, Inc. (NYSE:CAG).

Last year, the company acquired Agro Merchants Group, one of the largest temperature-controlled warehouse companies in the world with 2,900 customers. The acquisition raises Americold’s share of the U.S. cold-storage market to 21.4%, making it one of the top players in the industry.

Despite the pandemic, the company boosted its sales by 11% and its core EBITDA by 16% for the year of 2020.

REITs: Digital Realty (DLR)

Digital Realty (NYSE:DLR) is one of the world’s leading REIT owners of data centers. The company serves customers in several industries, including information technology, healthcare, financial services, communications, manufacturing and consumer products. Given the overall growth in the data center industry, owning DLR stock is a smart move.

The company owns over 285 data centers in 24 different countries, and the pandemic has driven increases in work-from-home and streaming demand. The rollout of 5G technology should also benefit Digital Realty.

Another attractive point in DLR stock’s favor is that the company has consistently raised its dividend price for years. Since 2016, the dividend price has risen over 30%.

VICI Properties (VICI)

VICI Properties (NYSE:VICI) owns hospitality, leisure, entertainment and gaming facilities. Its several dozen properties include four championship golf courses and 34 acres of land next to the Las Vegas Strip. VICI also has a stake in Chelsea Piers in New York City.

The company could be a smart bet as businesses reopen to meet the pent-up demand for entertainment and hospitality. VICI is also acquiring Venetian’s real estate assets, which may prove to be a big win.

The REIT offers a solid dividend yield and has been consistently raising its dividend. It also has an attractive balance sheet. VICI stock has been on a tear over the last year or so, especially as the economy has responded to businesses opening back up.

REITs: Kimco Realty (KIM)

Kimco Realty (NYSE:KIM) owns and operates open-air retail properties in the U.S. and Puerto Rico. Its properties are shopping centers anchored by grocery stores and big-box retailers. Kimco announced plans to merge with Weingarten Realty Investors (NYSE:WRI) earlier this year, making it an attractive play in the retail space.

With a forward dividend yield of more than 3%, Kimco also looks attractive from that standpoint.

STAG Industrial (STAG)

STAG Industrial (NYSE:STAG) invests in properties like warehouses across the U.S. The company has benefited significantly from the consumer shift to online shopping. Its largest tenant is Amazon, and about 40% of its warehouse space is leased to e-commerce tenants. The company owns nearly 500 buildings, covering 99 million square feet of space.

One of the benefits of owning STAG Industrial is that it pays dividends monthly rather than quarterly. Cash flows from long-term leases support this dividend payment model, as less than one-quarter of its leases expire through the end of next year.

STAG has an impressive forward dividend yield of nearly 4%, which also makes it very attractive to investors.

REITs: Physicians Realty Trust (DOC)

Physicians Realty Trust (NYSE:DOC) is a healthcare REIT that owns medical offices and leases them to regional and national healthcare networks. The company owns 275 properties across more than 30 states. The REIT’s portfolio was 96% leased as of the end of September.

A large percentage of Physicians Realty’s healthcare tenants are investment-grade. It also holds many facilities located off hospital campuses, which is important because healthcare has increasingly moved to outpatient services.

Physicians Realty has been holding its dividends flat, unlike many of the other REITs on this list. However, it still offers a nice 5% dividend yield.

Equity Commonwealth (EQC)

Equity Commonwealth (NYSE:EQC) owns office buildings in central business districts and suburban areas. Many of its properties are leased to healthcare and U.S. government tenants, and it owns industrial land in Hawaii.

Historically, Equity Commonwealth has offered high dividend yields, making it attractive for investors.

REITs are an appealing way to build a steady stream of fixed income for your portfolio. They’re also a great way to get into real estate without having to buy properties outright. With a little bit of time and effort, you can gain a steady stream of income with investments in REITs.

On the date of publication, Michelle Jones did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. 

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