3 REITs to Buy and Hold for the Long Term

Saturday, May 15, 2021 | Sean Sechler
3 REITs to Buy and Hold for the Long TermBuy and hold investing certainly has its advantages, but you need to make sure you are choosing only the best stocks for your portfolio to ride out any volatility. If you select too many high-risk companies for your portfolio, you might find that it is difficult to sit tight over the years during declines. On the other hand, choosing stable securities such as REITs is a nice way to generate competitive total returns over the long term without having to worry as much about big drawdowns in your accounts.

Real estate investment trusts, or REITs, are attractive to buy and hold investors for several reasons. They typically compensate investors with high dividend yields that are secured thanks to stable rents from long-term leases. REITs also provide an easy way to diversify your portfolio since they offer exposure to real estate. It’s also nice that you can take advantage of their liquidity and buy and sell shares of REITs on a stock exchange instead of buying and selling property directly. If you are interested in these types of investments, check out our list of 3 REITs to buy and hold for the long term below.

Federal Realty Investment Trust (NYSE:FRT)

This is a high-quality REIT that specializes in the ownership, management, development, and redevelopment of shopping centers, street retail properties, and mixed-use developments. With properties that are concentrated in some of the biggest metropolitan markets in the country including Los Angeles, Washington D.C., New York, and Silicon Valley, Federal Realty Investment Trust is a great option for the long term because it is focused on only owning properties in highly desirable areas with strong growth. That means the company has tons of properties in affluent areas that retailers want to lease, which is a strong selling point.

While you might be thinking that retail is going to have big problems over the next few years due to the rise of e-commerce, Federal Realty Investment Trust has a lot of tenants like grocery stores, restaurants, fitness centers, and other service-based businesses to attract people to their properties. It’s also worth mentioning that the increasingly competitive retail industry is forcing retailers to only go with the best properties, which is another great reason to consider adding this REIT. Federal Realty Investment Trust currently offers investors a 3.8% dividend yield and is a fine choice for buy and hold investors.

Innovative Industrial Properties (NYSE:IIPR)

If you are a big believer in the burgeoning U.S. cannabis industry for the long-term, Innovative Industrial Properties is a nice choice. It’s the only NYSE-listed REIT that specializes in medical-use cannabis growers. Medical cannabis is already a multi-billion-dollar industry that is expected to grow to roughly $34 billion by the year 2025. When you consider how much space these growers need to harvest their product, owning shares of a company with a portfolio of 66 properties and 5.4 million square feet specifically intended for that makes a lot of sense.

Investors should also consider the fact that more states are expected to legalize cannabis use in the coming years, which would be another positive for Innovative Industrial Properties. New tenants and more properties will allow the company to continue to increase the dividend, which has grown by over 60% in the past 3 years. This REIT currently offers investors a 3.16% dividend yield and is a smart way to play the cannabis industry for the long term.

STAG Industrial, Inc. (NYSE:STAG)

Finally, we have STAG Industrial, a REIT that is a great way to play the trend in e-commerce growth. STAG invest in warehouses across the country and about 40% of its portfolio is leased to e-commerce tenants. We know how important large warehouses are for e-commerce companies as they fulfill millions of orders every day, and STAG Industrial’s properties offer approximately 92.3 million rentable square feet. The company’s biggest tenant is Amazon (NASDAQ:AMZN), which tells investors a lot about the quality of this company’s portfolio.

It’s also worth mentioning that STAG Industrial is one of the only REITs that offer monthly dividends, which is great for buy and hold investors that want constant payouts. What’s also impressive about this REIT is that it has grown its dividend every year since going public back in 2011, a testament to its financial strength. STAG Industrial currently offers a 4.11% dividend yield and is a great addition to any long-term portfolio.

Should you invest $1,000 in Federal Realty Investment Trust right now?

Before you consider Federal Realty Investment Trust, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Federal Realty Investment Trust wasn't on the list.

While Federal Realty Investment Trust currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The 5 Stocks Here

 


Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Federal Realty Investment Trust (FRT)2.5$117.53flat3.61%77.32Hold$111.15
Innovative Industrial Properties (IIPR)2.3$214.99flat2.60%60.56Buy$213.14
STAG Industrial (STAG)2.3$41.32flat3.51%37.23Hold$37.33
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