Sarah Travers
With the S&P 500 recently reaching historic highs, investors searching for promising opportunities to bolster their retirement accounts are facing a unique challenge. Yet, in the midst of this bullish market, there are three real estate dividend stocks that stand out as potential gems: Agree Realty (ADC), Alexandria Real Estate Equities (ARE), and VICI Properties (VICI). These resilient publicly traded real estate investment trusts (REITs) have consistently paid out at least 90% of their taxable income as dividends, making them worth considering even in the face of rising interest rates.
Agree Realty – A Reliable Performer
Agree Realty, a respected retail REIT, holds a diverse portfolio of approximately 2,100 properties spread across 49 states. A noteworthy fact is that nearly 70% of its rental income is derived from investment-grade tenants, ensuring its financial stability. In 2023 alone, Agree Realty added 319 properties to its portfolio, showcasing its potential for growth. Currently trading at around $60.11 per share, with analysts predicting a consensus target price of $68.44, there’s a potential 13% upside. Additionally, the company has consistently increased its dividend by an average of 6.67% annually over the past three years.
Alexandria Real Estate Equities – A Distinctive Player
Alexandria Real Estate Equities, despite facing challenges in the office space sector due to the impact of COVID-19 and the surge in remote work, stands out for its unique niche. Specializing in life sciences space in major research and development clusters in coastal markets, the company boasts a tenant base consisting of major biopharma companies, universities, and government entities. Currently trading at approximately $122 per share, with a consensus price target of $143.11, Alexandria offers an impressive 18% potential upside. Moreover, it boasts an impressive track record of 14 consecutive years of annual dividend increases, with an average annualized growth rate of 5.4% over the past three years.
Vici Properties – The Emerging Player with Deep Roots
Vici Properties, the newest entrant among the trio, boasts a diversified portfolio that includes 54 casinos, 39 experiential properties, championship golf courses, restaurants, and over 60,000 hotel rooms in the United States and Canada. Despite its recent entry into the market, analysts foresee a 14% upside for Vici stock, with a targeted consensus price of $35.15. Currently trading at around $31 per share, the company has consistently increased its dividend every year during its five years in business, with an annualized growth rate of approximately 8.7% over the past three years.
Unlocking Retirement Potential
For retirees and income-focused investors, these REITs hold particular appeal due to their current dividend yields, ranging from 4% to 5%. As illustrated in the chart, these three REITs have consistently outperformed the S&P 500 in terms of yield, offering a dependable source of income. However, they also present the potential for growth, which is vital in light of ongoing concerns about inflation. As the market continues its bullish trajectory, Agree Realty, Alexandria Real Estate Equities, and Vici Properties remain attractive additions to retirement portfolios, delivering a balanced blend of income and growth opportunities.
