REITs hold a wide variety of properties, earn a stable income from tenants, and are mandatorily required to distribute dividends, providing a regular income stream. These factors make REITs suitable for diversification and stable income flow for your portfolios.

Given this backdrop, fundamentally sound REITs, Crown Castle Inc. (CCI), VICI Properties Inc. (VICI), and W. P. Carey Inc. (WPC) could be investment choices with dividend yields of over 5%.

Real Estate Investment Trusts (REITs) are an investment alternative in the market that allows investors to invest in real estate without owning or managing material properties themselves. They offer broad exposure and diversified investment portfolios and provide liquidity, high potential for return, and long-term growth.

REITs typically own and operate income-producing real estate across a wide range of properties like apartment buildings, cell towers, data centers, hotels, medical facilities, and offices. They earn from rent income and property dealings.

Owing to the rapid growth of e-commerce, the global demand for warehousing and storage facilities is continuously rising, opening more avenues for the REIT market. The REIT market is expected to grow at a CAGR of 2.9% until 2028.

Also, REITs' quality of distributing high and reliable dividends to shareholders on a regular basis makes them an appealing investment choice for investors seeking passive income. This is because REITs are required to distribute at least 90% of their taxable income to shareholders as dividends.

Considering these conducive trends, let’s take a look at the fundamentals of the three best REIT stocks.

Crown Castle Inc. (CCI)

CCI operates and leases over 40,000 cell towers and nearly 90,000 route miles of fiber supporting small cells and fiber solutions across every major U.S. market.

On August 8, CCI's Board of Directors declared a quarterly cash dividend of $1.56 per common share. The quarterly dividend will be paid on September 30, 2024, to stockholders of record at the close of September 13, 2024.

CCI pays an annual dividend of $6.26, which translates to a yield of 5.43% at the current share price. Its four-year average dividend yield is 4.24%. Moreover, the company’s dividend payouts have increased at a CAGR of 6.8% over the past five years. CCI has raised its dividends for nine consecutive years.

For the second quarter ended June 30, 2024, CCI reported net revenues of $1.63 billion, of which its total site rental revenues were $1.58 billion. The company’s net income came in at $251 million and $0.58 per common share for the quarter, respectively.

Furthermore, the company’s AFFO was $704 million and $1.62 per share, respectively.

The company reiterated its full-year 2024 outlook. CCI continues to expect site rental revenues between $6.32 billion and $6.36 billion. It also expects net income of $1.12 billion - $1.19 billion and $2.59 - $2.74 per share. And its adjusted EBITDA is set to range from $4.14 billion to $4.19 billion.

For the third quarter ending September 2024, CCI’s FFO is expected to increase 4.5% year-over-year to $1.68. For the fiscal year (ending December 2025), its FFO is expected to increase 1.8% year-over-year to $6.78. Also, CCI surpassed the consensus revenue estimates in three of the trailing four quarters.

Over the past six months, the stock has soared 10.3% and 19.2% over the past year to close the last trading session at $115.33.

CCI’s solid outlook is reflected in its POWR Ratings. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

The stock has a B grade for Momentum, Sentiment, and Quality. Within the REITs - Diversified industry, CCI is ranked #13 out of 45 stocks.

Click here to access additional ratings of CCI (Growth, Value, and Stability).

VICI Properties Inc. (VICI)

VICI is an S&P 500 experiential REIT that owns one of the largest portfolios of market-leading gaming, hospitality, and entertainment destinations, including Caesars Palace, MGM Grand, and The Venetian Resort in Las Vegas.

On September 5, VICI's Board of Directors declared a regular quarterly cash dividend of $0.43 per share of common stock for the period from July 1, 2024, to September 30, 2024, representing a 4.2% increase from the current dividend rate. The dividend is to be paid on October 3, 2024, to stockholders of record on September 18, 2024.

VICI’s annual dividend of $1.73 equates to a yield of 5.23% at the current share price. Its four-year average dividend yield is 4.90%. Also, the company’s dividend payouts have increased at a CAGR of 7.5% over the past three years. VICI has raised its dividend for five consecutive years.

During the second quarter that ended June 30, 2024, VICI’s total revenues increased 6.5% year-over-year to $957 million. Its adjusted EBITDA attributable to common stockholders grew 7.3% from the year-ago value to $775.87 million. The company’s net income was $752.75 million and $0.71 per common share, up 7.3% and 2.9% from the prior year’s quarter, respectively.

In addition, the company’s AFFO came in at $592.42 million and $0.57 per common share, indicating growths of 9.6% and 5.6% year-over-year, respectively.

Street expects VICI’s revenue and FFO for the third quarter (ending September 2024) to increase 5.5% and 21.5% year-over-year to $954.21 million and $0.67, respectively. Further, the company has surpassed the consensus revenue estimates in each of the trailing four quarters, which is promising.

VICI’s shares have gained 14.8% over the past six months and 7.9% over the past year to close the last trading session at $33.07.

VICI’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.

The stock has a B grade for Quality, Sentiment, and Momentum. Within the REITs - Hotel industry, VICI has topped among the 16 stocks.

In addition to the POWR Ratings highlighted above, you can check VICI’s ratings for Growth, Value, and Stability here.

P. Carey Inc. (WPC)

WPC is ranked among the largest net lease REITs with a well-diversified portfolio of high-quality, operationally critical commercial real estate, including 1,424 net lease properties covering around 173 million square feet and a portfolio of 89 self-storage operating properties.

On September 19, WPC's Board of Directors increased its quarterly cash dividend to $0.88 per share. The dividend is payable on October 15, 2024, to stockholders of record as of September 30, 2024. WPC pays an annual dividend of $3.50, which translates to a yield of 5.62% at the current share price. Its four-year average dividend yield is 5.83%.

WPC posted revenues of $389.67 million during the second quarter ended June 30, 2024. Net Income attributable to WPC and EPS amounted to $142.89 million and $0.65 for the quarter, respectively.

Also, the company’s cash and cash equivalents stood at $1.08 billion as of June 30, 2024, versus $633.86 million as of December 31, 2023.

According to the company's updated guidance for the full year 2024, WPC currently expects to report AFFO between $4.63 and $4.73 per share.

Street expects WPC’s revenue for the first quarter (ending March 2025) to increase 5.2% year-over-year to $410.24 million, and its FFO for the same period is expected to be $1.18. Furthermore, the company surpassed the consensus FFO estimates in three of the trailing four quarters.

WPC’s stock has gained 6.6% over the past month and 10.5% over the past six months to close the last trading session at $62.24.

WPC’s strong prospects are reflected in its POWR Ratings. WPC has a B grade for Quality, Sentiment, and Momentum. It is ranked #14 among the 45 stocks within the REITs - Diversified industry.

To see the other ratings of WPC for Stability, Growth and Value, click here.

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CCI shares were trading at $116.11 per share on Monday afternoon, up $0.78 (+0.68%). Year-to-date, CCI has gained 5.26%, versus a 20.54% rise in the benchmark S&P 500 index during the same period.

Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.

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