Wall Street is full of old adages. Most are just sayings, but a few of them really matter to investors. One of the best could be the old mantra. “Don’t Fight The Fed!” If the Federal Reserve hands you lemons, make lemonade. And if it hands you plenty of sugar, feast on the nectar. That’s just what our Best Dividend Stocks List’s pick in the real estate sector is doing.
With Jerome Powell & company now taking a dovish pause and keeping rates right where they are, our pick has plenty of ways to win in your portfolio.
As a high-yielding real estate investment trust (REIT), lower and stagnating rates cause dividend payers like our pick to be more in demand from investors as they search for higher income potential. Meanwhile, lower rates and cheaper borrowing costs are a positive for business, which is great for our pick. Our pick is one of the largest owners, managers and developers of first-class office properties in the United States, with over 47 million square feet of rentable space. Keeping the economy growing only enhances the demand for office buildings. Lower rates do just that. Even better is that our pick has focused on the hot bed corridors of Boston, Los Angeles, New York, San Francisco and Washington, DC.
All of this should translate into higher returns for investors over the long term.
Already our pick has become a strong dividend stock throughout its history because of its focus – increasing its payout by over 60% during the last ten years. But with the Fed pausing, our pick should offer more dividend growth from higher rents as well as plenty of capital appreciation. All in all, that should create a wonderful total return for portfolios today.
With a strong growth profile and steady cash flows, our pick is exactly what you need to avoid “Fighting the Fed.”
Check out our original pick here.
To summarize, here are five reasons why you should own this stock:
- Owns more than 200 prime properties in the five strongest markets in the nation, with an occupancy rate of over 90%.
- Recorded annual revenues of $2.5 billion with more than $750 million available for distributions.
- Smartly developing new properties in its markets with new construction already 85% preleased.
- One of the most conservative balances sheets in the sector with a leverage position of just 6.7×.
- Healthy payout ratio of 59% and growing yield of 2.90%.
Our Best Dividend Stocks List has 20 of the highest-rated stocks by our proprietary rating system. Go Premium to find out the entire list.