3 Best REITs for 2023
By: Jordan Ellis,
3 best REITs for 2023 to help investors obtain consistent returns also offer attractive dividend yields.
The real estate market has had a challenging last couple of quarters due to high interest rates, unrelenting inflation and recession fears. Even with these risks, REITs are becoming an enticing investment because of its exposure to the real estate market without the hassle of owning properties directly.
If the Federal Reserve can curb this inflationary period and keep the economy from sliding into a recession, REITs should benefit.
3 Best REITs for 2023: Prologis Inc. (NYSE: PLD)
Annual Dividend Yield: 2.85%
Prologis Incorporated, of San Francisco, California, is the largest REIT in the world and operates in 17-plus countries. Prologis’ main focus is on logistics-centered real estate with high barriers to entry and strong growth potential. Despite increasing inflation and high interest rates, Prologis obtained a 10.8% stock increase from March 2022 to March 2023. The REIT’s presence in logistics properties is relatively risk-averse compared to REITs in general, since delivery services are in high demand after the COVID-19 pandemic.
Prologis tops the list as one of the best REITs for 2023 because it owns high-barrier-to-entry properties and operates in a multitude of different real estate locales. Due to the company’s large portfolio size and its strong debt-to-equity ratio of 0.43, it should be able to weather potential inflation increases or recessionary risks. If investors are looking for substantial and consistent dividend yields that follow the market, Prologis could be the answer.
Chart courtesy of www.stockcharts.com
3 Best REITs for 2023: National Retail Properties (NYSE: NNN)
Annual Dividend Yield: 5.14%
National Retail Properties, of Orlando, Florida, is a REIT that invests primarily in long-term leases of retail stores in the United States. The company boasts reliable income streams from its multitude of long-term leases. Amid unpredictable interest rates, National Retail Properties offer consistent dividend returns with plenty of investment diversity.
In the real estate market, cash flow is king. National Retail Properties has some of the most stable cash flows in the industry due to its long-term leasing set-up, which should help weather any recessionary period that occurs.
While National Retail Properties is well positioned, it is not immune to a drop in its share price. The company endured a 5.2% stock decrease from March 2022 to March 2023. But, if investors are looking for relatively high annual dividends, not many REITs are better than National Retail Properties.
Chart courtesy of www.stockcharts.com
3 Best REITs for 2023: American Tower Corporation (NYSE: AMT)
Annual Dividend Yield: 3.05%
American Tower Corporation, of Boston, Massachusetts, is an owner and operator of more than 181,000 wireless and broadcast communications facilities on a global scale of 20 countries. This REIT, much like National Retail Properties, operates on long-term leases to communications and wireless carriers, which boast strong cash flows and reliable yearly income. The company has a debt-to-equity ratio of 2.54, which suggests low long-term debt and risk of bankruptcy.
AMT focuses heavily on leasing its communications equipment to large wireless carriers. With the introduction of technology like 5G and ultra-high-speed internet, the management of American Towers will not have to worry about absent tenants. The wireless and broadband industry has an extremely high barrier to entry, and it is unlikely that AMT will stop boosting its dividend each quarter since 2012. The REIT’s current dividend yield of around 3% lets investors be paid for their patience as owners of AMT shares.
3 Best REITs for 2023: Conclusion
Investing in REITs like Prologis, National Retail Properties and American Tower could be financially rewarding for those seeking to benefit from a recovery in the real estate industry in 2023.
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