7 REITs to Buy Now for Dividend Growth

Stocks and bonds have largely rewarded market denizens since the Great Recession’s market nadir in 2009, but investors great and small may be pondering how much leg the current rally has left.

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Stocks and bonds have largely rewarded market denizens since the Great Recession’s market nadir in 2009, but investors great and small may be pondering how much leg the current rally has left. Real estate investment trusts (REITs) might be the asset class investors need to thread the needle in this tenuous bull market.

This summer, prominent hedge-fund king Ray Dalio wrote that market paradigms are shifting (opens in new tab), and the next decade’s prospects are for slow growth and chronically soft interest rates. He believes the world’s central banks, including America’s Federal Reserve, “doing more of this printing and buying of assets will produce more negative real and nominal returns that will lead investors to increasingly prefer alternative forms of money (e.g., gold) or other storeholds of wealth.”

While Dalio suggests investors might add gold to their portfolios, they might want to start researching REITs to buy, too. That’s because real estate also has been a classic hedge against inflation, and it tends to benefit from low interest rates.

Another upside: REITs can throw off substantial income; gold does not. By law, real estate investment trusts must distribute 90% of taxable income to shareholders through dividends. But the ultimate hedge is finding REITs that reliably (and, when possible, aggressively) increase their payouts, as that will keep the dividend from actually losing value due to inflation over time.

Here are seven REITs to buy for investors who are interested in dividend growth. These real estate companies are poised to sustain and improve their cash distributions through the possibly sluggish, low-interest-rate future that some experts are predicting.

Data is as of Oct. 6. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price.

Benjamin Cole
Contributing Writer, Kiplinger.com
Benjamin Cole has covered Wall Street and economics since 1980, writing on-staff for US News & World Report, Investor's Business Daily and the Los Angeles Business Journal, among other publications. He has two books published by Bloomberg Press, The Pied Pipers of Wall Street and The New Investor Relations and never tires of writing about investing and the economy.