11 Best REITs To Invest In for 2022

Dawn Allcot
svetikd / iStock.com
svetikd / iStock.com

REITs, or real estate investment trusts, allow people who may not have the funds to invest in properties, especially commercial properties, to purchase a stake in real estate development projects, buildings and land.

See: 5 Things You Must Do When Your Savings Reach $50,000

When you purchase a REIT, you are investing in a company that owns or finances income-producing real estate. REITs offer dividends to shareholders, making them a profitable investment even before you sell them.

Keep reading to learn about the 11 best REITs to invest in this year.

Which REITs Are the Best To Invest In?

Experts have differing opinions on the best REITs, so you’ll need to evaluate each one based on where it might fit into your general investing portfolio. Keep in mind that many lower-yield REITs based on the dividend percentage may end up outperforming higher-yield REITs if the company is more profitable. You’ll want to find that sweet spot between a high yield and a high-performing REIT to balance your portfolio and create passive income through your investments over time.

Based on GOBankingRates’ research, these are some of the best REITs of 2022:

  • Gaming and Leisure Properties Inc. (GLPI)

  • Camden Property Trust (CPT)

  • Iron Mountain Inc. (IRM)

  • VICI Properties Inc. (VICI)

  • Realty Income Corp. (O)

  • STAG Industrial Inc. (STAG)

  • Getty Realty Corp. (GTY)

  • Gladstone Commercial Corp. (GOOD)

  • AGNC Investment Corp. (AGNC)

  • Digital Realty Trust Inc. (DLR)

  • Armour Residential REIT Inc. (ARR)

Gaming and Leisure Properties Inc. (GLPI)

Gaming and Leisure Properties Inc. is hailed as the first gaming REIT. The company holds 57 gaming facilities and related properties, such as hotels, across the U.S. The company manages triple-net lease arrangements for gaming facility operators.

The gaming industry has rebounded recently, and that is reflected in GLPI’s recent growth. GLPI has distributed annual dividends of more than $2 per share since 2015. It is offering a 5.70% dividend equal to 71 cents per quarter.

Camden Property Trust (CPT)

One of the largest publicly traded REITs related to multidwelling units, sometimes called multifamily, Camden Property Trust is listed on the S&P 500. Based in Houston, it owns and operates 171 properties across the U.S. The company is currently issuing a quarterly dividend of 94 cents and has a dividend yield of 3.29%.

Iron Mountain Inc. (IRM)

Iron Mountain is traded on the Nasdaq composite and could be considered a tech REIT, since it specializes in record storage and data center buildings. At the beginning of 2022, Seeking Alpha called it  a “must-own stock.” It offers a dividend yield of 4.78%, delivering a quarterly dividend of 62 cents.

VICI Properties Inc. (VICI)

With gaming, hospitality and entertainment on an upswing recently, VICI Properties is a promising REIT investment. The company owns and operates 43 gaming and entertainment facilities, also consisting of hotels, restaurants, bars, nightclubs and sportsbooks. Some of its highest-profile investments include Las Vegas’ Caesars Palace, MGM Grand and the Venetian Resort. VICI pays a quarterly dividend of 39 cents per share and has an annual dividend yield of 4.93%. This dividend has risen steadily in recent years, more than doubling since 2018.

Realty Income Corp. (O)

Realty Income Corp. calls itself “The Monthly Dividend Company.” Part of the S&P 500 index, Realty Income has more than 11,700 commercial real estate properties. The company’s success has enabled it to increase its dividend payout 117 times since 1994. The dividend yield is 4.66%, with a current quarterly payout of 74 cents.

STAG Industrial Inc. (STAG)

Boston-based STAG Industrial focuses on industrial properties across the U.S. The company recently received an “A” rating from GRESB for its sustainability efforts and Public Disclosure Level. The rating compares favorably to the average score of “C” among 10 industrial real estate companies in a comparison group, as noted in a press release issued by STAG. STAG ranked second on the list of 10 comparison companies. The rating results in an interest rate reduction for three of the company’s unsecured loans and its $1 billion unsecured revolving credit account.

In the fourth quarter of 2022, STAG disbursed monthly dividends of 12 cents. STAG offers a dividend yield of 4.47%.

Getty Realty Corp. (GTY)

Getty Realty Corp. holds 1,021 single-tenant properties, including convenience stores, gas stations, car washes and other stand-alone retail properties across 38 states and Washington, D.C. The company has a dividend yield of 5.43%. The company delivers quarterly dividends of 43 cents per share.

Gladstone Commercial Corp. (GOOD)

Gladstone operates multiple REITs. Gladstone Land Corp., which purchases, leases and manages farm properties, is currently considered overvalued, according to Zacks.

But Gladstone Commercial, which specializes in single-tenant and multi-tenant industrial and office properties, delivers a high return and is rated as a fair value. Gladstone Commercial has one of the higher percentage dividend yields on this list, at 8.12%. Investors receive a 38-cent quarterly dividend per share.

AGNC Investment Corp. (AGNC)

AGNC has one of the highest annual dividend yields you will find right now, at 15.22%. However, keep in mind that higher percentages don’t always mean bigger payouts. The company pays a quarterly dividend of 36 cents per share, which is roughly the same as many other investments on this list that have a lower annual yield. Nevertheless, Zacks gives AGNC a rating of 1, or “strong buy,” and says investors can expect an above-average return from the REIT relative to the market. The REIT may be undervalued, making it a good pick. AGNC’s portfolio is comprised primarily of residential mortgage-backed securities.

Digital Realty Trust Inc. (DLR)

While Iron Mountain specializes in both paper record storage and also digital data centers, Digital Realty specializes in industrial buildings that house physical servers for businesses that use cloud storage as part of their operations. Digital Realty has an annual dividend yield of just 4.44% but has a high quarterly dividend payout of $1.22 per share. Seeking Alpha says Digital Realty has “exceptional growth potential.” Some of Digital Realty’s clients include top players in tech like IBM, Oracle, Meta and Lumen Technologies.

Armour Residential REIT Inc. (ARR)

Armour invests primarily in residential mortgage-backed securities. The company has faced some difficulties over the past year, reducing its monthly dividends from 17 cents per share in 2020 to 10 cents per share in 2021. However, it does have one of the highest annual dividend yields we’ve discovered in our research, at 21.54%. Armour currently delivers a quarterly dividend of 30 cents. It’s also an affordable investment, trading at just $5.57 per share as of Nov. 16.

According to Zacks, Armour is fairly valued at the moment and has solid financial health and growth prospects, which make it an investment to consider.

What Is a REIT?

A REIT, or real estate investment trust, is a company that develops, manages or finances commercial real estate. REITs make costly building projects possible without putting the burden on a single investor. Meanwhile, they allow people to invest in a portfolio of commercial real estate passively. REIT investors do not have to manage the property but can profit from its income. REITs are mandated to pay at least 90% of their taxable income back to shareholders, so many have very hefty dividends compared to stocks.

According to the worldwide organization Nareit, more than $4.5 trillion in real estate assets are owned by REITs. Of that money, $3 trillion is owned by publicly held REITs, or REITs that you can invest in.

You can invest in REITs through 401(k)s, individual retirement accounts, pension plans or other investment funds, as noted by Nareit. You can also invest in REITs through most brokerage firms, such as Charles Schwab or TD Ameritrade, and investment apps.

Are REITs a Good Investment in 2022?

Commercial real estate continues to be a lucrative market, even amid a bear stock market. Seeking Alpha calls REITs a “resilient” investment. When you’re choosing REITs, you want to look at the income benefits derived from dividends more so than the portfolio value. The value of the REIT will change in line with the real estate market as a whole. Likewise, look at REITs that scale their income based on inflation.

One of the key goals when choosing REITs is to invest in companies that pay high dividends so you can build passive income. But keep in mind that high annual yields don’t always mean the largest dividend checks, since dividends depend on the company’s net profits.

In general, REITs are an excellent way to create cash flow from your investments. They also tend to be less volatile than other investments, including stocks. They allow you to create a diversified real estate portfolio without any of the disadvantages of investing in real estate directly. As with any investment, there is risk involved in REITs, so be sure not to invest more than you can afford to lose.

Data is accurate as of Nov. 16, 2022, and is subject to change. Information on dividends was sourced from Google Finance.

This article originally appeared on GOBankingRates.com: 11 Best REITs To Invest In for 2022

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