If you thought June and July were tough from an interest rate perspective, September could be just as bad, because it’s pretty much priced in now that the Federal Reserve will raise rates next month another 75 basis points before to take a break until November. As we noted earlier, the adage “Don’t fight the Fed” works both ways. Chances are the Fed will continue to raise rates until the inflation spiral begins to subside.
Real estate investment trusts (REITs) are an asset class that tends to survive rate hikes and periods of inflation. As overall costs increase, so do the rents and leases held by REITs. In fact, in a recent cycle of rising rates, REITs outperformed the S&P 500 by more than double. In addition, the rise in rates is forcing some potential buyers to stay rented, whether they are houses or apartments.
We scoured our 24/7 Wall St. REIT research database for solid ideas that also pay big, reliable dividends. All of these have been hit hard and provide the best entry points for long-term investors looking to add sustainable assets to their portfolios.
Although the seven companies we discovered are all rated Buy at Major Wall Street Firms, it is important to remember that no analyst report should be used as the sole basis for any buy or sell decision. .
Getty Real Estate
Despite concerns about climate change, the reality is that people still need gas for their cars, trucks, and vans, and gas stations still meet that basic need. Getty Realty Corp. (NYSE: GTY) is a publicly traded net lease REIT specializing in the acquisition, financing and development of single-tenant convenience, automotive and other commercial properties. As of March 31, 2022, the company’s portfolio included 1,014 properties in 38 states and the District of Columbia.
With large footprints in Texas and California, the company serves some of the most populated regions in the country and posted strong first quarter results with funds from operations exceeding Wall Street expectations.
Shareholders receive a distribution of 5.47%. JMP Securities’ target price for Getty Realty stock is $32. The consensus target is $33.21 and the stock closed Friday at $30.32.
This stock has been hit hard by rising interest rates and offers the best entry point in over a year. Gladstone Commercial Corp. (NASDAQ: GOOD) is focused on acquiring, owning and operating net leased industrial and office properties across the United States.