It is very evident that REITs can make fantastic long-term investments and provide investors with stable income over the years, which is why it …
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August 21, 2021 4 min reading time
This story originally appeared on MarketBeat
If you’ve always wanted to invest in real estate without actually owning physical property or having to act as a landlord, real estate investment trusts or REITs should definitely be on your radar. These are investment vehicles that offer exposure to specific areas of the real estate market, offer constant income in the form of dividends, and are a great way to diversify your portfolio holdings. They can even be used to hedge against inflation and help investors take advantage of tax breaks as many of these companies do not pay corporate income tax.
It goes without saying that REITs make fantastic long-term investments and can provide investors with stable income over the years, which is why it is a good idea to pursue some of the best names in the business. This is particularly true in light of the inflation worries that dominate the financial markets today. Read below for an overview of 3 great REITs you can buy right now.
Digital Realty Trust (NYSE: DLR)
Cloud computing has certainly taken the investment world by storm in the past few years, and the fact that Digital Realty Trust offers data center, co-location and connectivity solutions for domestic and international renters makes it a very fascinating way to tap into this exciting technology to play . Data centers are important for a number of reasons, as many companies rely on them to collect, store, and process all of their data, and to provide backup and network solutions. These centers also support cloud storage applications and e-commerce transactions, and with almost every business relying on them in some way today, the potential of Digital Realty Trust is easy to see.
This REIT offers a dividend yield of 2.85% and has increased its dividend for 16 straight years, which is another good reason to consider a stock increase. The company recently announced second quarter results that saw Digital Realty Trust’s revenue jump 10% year-over-year to $ 1.1 billion, a sign that data centers are still attracting a lot of corporate interest. Management also increased the company’s revenue and Adjusted EBITDA estimates for the year, which is a good sign that the REIT will end the year in positive territory.
American Tower Corp (NYSE: AMT)
Next up, we have a REIT that towers above many competitors and continues to hit new all-time highs in 2021. American Tower Corp owns, operates, and develops multi-tenant communications real estate, making it a fantastic way to get involved in the ongoing 5G revolution. This is a great example of how REITs can provide exposure to certain lucrative areas of the real estate market with tremendous growth potential, and the tower business is one of the most attractive segments for several reasons.
Cellular operators tend to enter into long-term leases with American Tower that include rental escalators, which essentially bring the company steady revenue growth over time. Since data usage is growing almost exponentially, the American Tower area is sure to be in high demand. Even in international markets that are likely to have large investments in wireless networks, there are many benefits for the company to keep pace with the rapid adoption of 4G and 5G technology. The bottom line is that American Tower is a leading provider of towers that power many of the most popular devices today, making it a top choice for investors looking for the best REITs.
Another strong area of the real estate market for long-term profits is self-storage systems. These are properties that offer customers affordable, accessible and safe storage space, which is very attractive given that so many people are rethinking their housing situation after the pandemic. CubeSmart is one of the three largest owners and operates these facilities in the United States with over 1200 locations across the country. It also has a strong exposure to the New York market, which is a plus as we know how tight space is for many people in the Big Apple.
Offering a dividend yield of 2.67% for investors, this REIT is a company that deserves more attention, especially since its stock is up over 53% since the start of the year. CubeSmart recently reported strong Q2 results, with sales in the same store up 14% year over year. The company has also actively increased its rates, which should help CubeSmart achieve even better financial results over the long term. This is certainly a worthwhile REIT to buy now, especially since May through September are the busiest months of the year for the company.