One of the best ways to protect your portfolio, and generate consistent income is with higher-yielding real estate investment trusts (REITs). In fact, we’re going to look at seven of the best REITs to buy in April below.
Look at Realty Income (NYSE:O), for example.
Known as The Monthly Dividend Company, Realty Income will pay you every month to hold its stock. Yielding 5.86%, the company just declared a new dividend of 25.7 cents, which is payable on April 15 to shareholders of record as of April 1.
This is now the company’s 645th monthly dividend-increase over its 55-year history.
And if you missed the latest deadline, no worries. Another dividend is on its way. Even better, with the recent pullback in Realty Income, you’re getting a bargain.
Plus, once the Federal Reserve starts cutting interest rates, REITs may become even more attractive. As noted by BankRate.com, “With rate cuts on the horizon, dividend yields for REITs may look more favorable than yields on fixed-income securities and money market accounts.”
That being said, here are a few of the best REITs to buy in April that you may want to jump into today.
Medical Properties Trust (MPW)
With a yield of 14.18%, Medical Properties Trust (NYSE:MPW) is a triple net lease REIT, which means the lessee is responsible for rent, utilities and property expenses, such as maintenance. It owns about 439 hospitals across nine countries, and has reliable cash flow.
Granted, the REIT has fallen on hard times in recent years.
But it may soon find some relief once its struggling tenant – Steward Health Care – offloads its physician network, which will allow it to repay all outstanding debts to MPW. The move would be a “positive step to help the health system resolve its immediate financial issues,” RBC Capital Markets analyst Michael Carroll added, as noted by Seeking Alpha.
Helping, analysts over at BNP Paribas just upgraded the REIT to an outperform rating, with a price target of $6. We also have to consider that MPW will benefit from an aging population. At the moment, according to the Centers for Medicare and Medicaid Services, total healthcare expenses will hit $6.8 trillion by 2030, which MPW should benefit from significantly.
Agree Realty (ADC)
Another one of the best REITs to buy in April is Agree Realty (NYSE:ADC), which also pays out a monthly dividend.
With a yield of 5.27%, the REIT just declared a monthly cash dividend of 24.7 cents per share. That’s payable on April 12 to shareholders of record as of March 28. If you missed the deadline, don’t worry about it. Another one is most likely on the way.
Earnings haven’t been too shabby either.
In its most recent quarter, the company said its adjusted funds from operations (FFO) came in at $1, which was in line with expectations. Revenue of $144.2 million did beat estimates for $141.2 million. That was also up nicely from the $136.8 million posted a year earlier. Plus, in its recent quarter, it acquired another 50 properties, including retailers in home improvement, farm and rural supply, and convenience stores.
In addition, director John Rakolta recently bought 20,102 shares of ADC in February. Chief Accounting Officer Stephen Breslin also bought nearly $25,000 worth of shares in March.
Digital Realty Trust (DLR)
Yielding about 3.5%, Digital Realty Trust’s (NYSE:DLR) data centers are an essential part of the digital world. After all, without data centers, we wouldn’t have a digital world.
You see, everything that happens online depends on data centers. They operate 24/7 ensuring the continuous operation of essential digital services all over the world. They make it possible for us to interact and do business, for example, through our smartphones and computers.
We also have to consider that the global data center market is massive.
Valued at about $328.1 billion in 2023, the market could be worth more than $792 billion by 2032, according to Astute Analytica.
“Cloud spending is a major driver of data center growth in 2024. Public cloud services spending is expected to grow by 20.4% in 2024, due to both price increases by cloud vendors and increased utilization. Cybersecurity investments are another significant factor, with around 80% of CIOs planning to increase their spending on cyber/information security in 2024,” they added.
With digital growth showing no signs of slowing, Digital Realty Trust and its yield become even more attractive.
Iron Mountain (IRM)
Another hot data center REIT to consider is Iron Mountain (NYSE:IRM), which yields 3.24%.
The REIT – which is aggressively expanding its data center capacity to meet the demand of the generative artificial intelligence (AI) boom is just as attractive as Digital Realty Trust.
Plus, earnings have been solid. In its most recent quarter, the REIT posted revenues of $1.42 billion – up 11% year-over-year (YOY). Adjusted EBITDA of $525 million was also up 11% YOY. Adjusted funds from operations (AFFO) came in at $328 million, up 10% YOY.
Moving forward, IRM expects for AFFO to come in between $4.39 and $4.51 for 2024, from $4.12 in 2023. Revenues are expected to come in between $6 billion and $6.15 billion, which would be about 11% YOY growth. In addition, adjusted EBITDA is expected to be between $2.175 billion and $2.225 billion, which is also above expectations for $2.16 billion.
Data Center & Digital Infrastructure ETF (DTCR)
Or, if you want to diversify with data center REITs, there’s the Data Center & Digital Infrastructure ETF (NASDAQ:DTCR), which last traded at $15.18 a share. While this ETF only yields about 1.11%, I like it because of its diversification with top data center stocks set for substantial growth in our digital world.
With an expense ratio of 0.50%, the ETF holds 25 related stocks, including, Equinix (NASDAQ:EQIX), American Tower (NYSE:AMT), Crown Castle (NYSE:CCI), Digital Realty Trust, and Digital Bridge (NYSE:DBRG). All of which should benefit with global data center investments “expected to increase from $321bn in 2022 to $410bn in 2025 to support the growth of 5G, smart grids, and other forms of tech-based infrastructure,” says Global X ETFs.
Since bottoming out at around $11.78 in late 2023, it’s now up to $15.18. From here, with data center growth only expected to explode, I’d like to see it closer to $25 near term.
STAG Industrial (STAG)
Next up is STAG Industrial (NYSE:STAG), which yields just under 4%. It also been paying a monthly dividend of 12.3 cents throughout the first three months of the year. That should continue as is for the second quarter as well.
The REIT – which leases industrial properties, such as warehouses and distribution centers to e-commerce companies – is also benefiting from consumers shifting to online shopping.
“Current projections estimate that by 2025, online shopping could represent one-quarter of all retail transactions,” says MidMichiganNow.com. “This shift is primarily driven by the convenience of shopping from home, which offers consumers the ability to browse and purchase without the need to travel, endure potential crowds, or face the disappointment of out-of-stock items.” As long as that trend continues, REITs like STAG should benefit.
Helping, e-commerce sales are expected to grow to about $3.178 trillion this year. By 2029, sales could be up to $4.997 trillion. All of which makes STAG even more attractive.
Apple Hospitality REIT (APLE)
Another one of the best REITs to buy in April is Apple Hospitality REIT (NYSE:APLE), which yields 6%.
At the moment, APLE owns about 224 hotels in 87 markets throughout 37 U.S. states. All of which should benefit from the upcoming travel season. It also just announced a monthly cash distribution of eight cents per share, payable on April 15 to shareholders of record as of March 28. Annualized it comes out to 96 cents a share.
Earnings have been solid here, too. In its most recent quarter, its FFO came in at 31 cents, which beat by a penny. Revenues of $312.46 million – up 4.5% YOY – beat by $10 million. Some of its top tenants include hotel chains such as Marriott International (NASDAQ:MAR) and Hyatt Hotels (NYSE:H) – most of which are likely to benefit as millions prepare to take summer vacations.
From its current price of $15.99, I’d like to see the APLE REIT closer to $25 this year – especially if the summer travel season gets busy again.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.