Every investor has likely heard the words “diversify your portfolio.” They also say “variety is the spice of life”, and with investments (like real Estate), that couldn’t be any truer. That’s because exposure to multiple types of investment can be essential in combatting inflation, generating income, and balancing risk and reward – especially in a challenging economy.
This talk about diversity brings us to REITs. These investment vehicles are a great way to add some diversity and stability to your portfolio, all while generating some serious returns in the process.
And while real estate may have been the worst-performing over the last year, diversified REITs offering a mix of residential and commercial assets in various industries have proven safe havens in the market. They have also outperformed on the right mix of value, growth, plus characteristics like momentum, profitability, and EPS revisions.
In this week’s edition, we’ll spotlight three top diversified REITs that provide above-average yields and should be considered if you want to invest in REITs.
We’ll also talk about
🤖 Investing More Into AI Efforts
🎲 Gamifying Your Financial Habits
🏡 Brandon Turner’s “The Book on Rental Property Investing”
🪙 Buy vs Rent: Two Sides of A Coin
📚 Buzz Bites: Google Doubles Down On AI
There’s been an intense rave about artificial intelligence, and how it can disrupt the status of things in coming years. So, it’s not surprising that besides its own AI offering (Bard), Google is also looking at other ways to venture into the AI market. According to a recent report, the tech giant has now invested in artificial intelligence start-up Runway, which specializes in allowing customers to quickly make videos from text descriptions.
This follows the signing of text-to-image maker Midjourney, and chatbot name Character AI. These acquisitions/investments are related to the ongoing scramble among big-tech rivals to win AI customers.
💡3 Top Diversified REITs to Buy
1. Essential PROPERTIES Realty Trust, Inc. (NYSE: ERPT)
Market Capitalization: $3.65B
Dividend Safety Grade: A-
Dividend Yield (FWD): 4.50%
Essential Properties Realty Trust is a strong and stable REIT that offers income and growth. It has enduring relationships with major tenants, including Taco Bell, McDonald’s, Marriott, and Circle K. The company has a strong balance sheet and has maintained a Strong Buy rating. Its rent coverage remains nearly 4x in Q1, and most of its new sale-leaseback transactions come from existing relationships. The management proactively identifies and takes advantage of pricing opportunities while mitigating risks from a diversified perspective.
2. EPR Properties (NYSE: EPR)
Market Capitalization: $3.16B
Dividend Safety Grade: B-
Dividend Yield (FWD): 7.86%
EPR Properties is a leading experiential net lease REIT that adds fun to portfolios by investing in out-of-home entertainment experiences like commercial gaming, Top Golf, Margaritaville, and leading ski resorts. With strong liquidity, the company plans to expand in a disciplined manner across various experiential properties with a committed pipeline. Despite COVID-19, its earnings have surpassed expectations, making EPR Properties an excellent choice for income-focused value investors seeking an almost 8% dividend yield.
3. Broadstone Net Lease, Inc. (NYSE: BNL)
Market Capitalization: $3.12B
Dividend Safety: B-
Dividend Yield (FWD): 7.86%
Broadstone Net Lease, Inc. is a REIT offering commercial net lease properties diversified by location, tenant, industry, and brand. With a proven strategy for defensive growth, BNL offers single-tenant and commercial properties throughout the U.S., focusing on credit analysis and real estate underwriting. With a longstanding track record of delivering attractive risk-adjusted returns, Broadstone trades substantially lower than its peers while maintaining strong momentum.
Interested in more real estate investment tips? Check out our ultimate guide for real estate investments in the U.S
📖 Hot Off The Shelves – What We’re Reading (And You Should Too)
As we’ve established, real estate investing can be an exciting and rewarding career — but it’s far from easy. It does get easier to navigate with the wisdom of others.
This week’s visit to the library sees us settle with Brandon Turner’s “The Book on Rental Property Investing: How to Create Wealth with Intelligent Buy and Hold Real Estate Investing“. This book is visionary, providing a solid foundation for newcomers learning the ins and outs of real estate investing.
From buying and holding properties to managing and selling them, Turner covers every stage of the process.
🎮 Putting The Fun In Finances
It used to be that meeting your financial goals would take a lot of discipline and sacrifice. Now, it can be a fun activity, like a video game. How? By taking the rewards system that games have, and putting them into financial apps. In other words, you could get incentives and rewards for financial activity, like saving!
If you want to make saving a part of your lifestyle, apps like Opportun (formerly Digit) let you set your goals and analyze your saving and spending patterns. They can also automate these tasks in ways that are customized to your unique tastes. And voila! The ‘boring’ side of finances is gone.
🔑 Buying vs Renting: Where Should You Stand?
The age-old debate on whether to buy or rent houses remains unresolved. That’s understandable, considering there are benefits, as well as disadvantages, to both sides, especially in Canada. And with the current state of the Canadian housing market characterized by hiked prices and uncertainties, the question pops up even stronger.
But there are predictions that house prices will drop sometime this year. So, which option should you consider? Check out which works best for you in our latest article.
