Rising Rates Won't Crush These 3 Dividend Stocks

Many investors have recently fled from high dividend paying real estate investment trusts (REITs), worried rising rates would cripple the businesses and hurt the bottom lines.

Image Source:

Yet recent research reveals over the last 33 years in the 135 months when the yield on U.S. Treasury Bills have risen, it turns out REITs have outperformed the market as a whole. In fact investment firm Cohen & Steers notes, "although rising interest rates can impact real estate values and the performance of REITs, higher interest rates do not necessarily lead to poor REIT performance." 

This will likely mean big things to the diversified and attractive operations of Realty Income (NYSE: O  ) , Health Care REIT (NYSE: HCN  ) and Digital Realty Trust (NYSE: DLR  ) , which all offer compelling reasons to consider an investment. Especially knowing part of the reason for historical outperformance was the reality rising rates often indicate an improving economy, which will ultimately cause more companies to expand and seek the property and assets provided by REITs. 

In video below, Fool contributor Patrick Morris speaks to why investors should always keep that in mind when considering an investment in a REIT, but it also shouldn't be used broadly to jump into any and every REIT out there. 

Nine more great dividend titans
One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks -- like REITs and the three mentioned above --as a group handily outperform their non-dividend paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio, and Warren Buffett also loves one. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2873634, ~/Articles/ArticleHandler.aspx, 8/29/2015 11:35:31 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Patrick Morris

After a few stints in banking and corporate finance, Patrick joined the Motley Fool as a writer covering the financial sector. He's scaled back his everyday writing a bit, but he's always happy to opine on the latest headline news surrounding Berkshire Hathaway, Warren Buffett and all things personal finance.

Today's Market

updated 1 day ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 4:04 PM
DLR $65.01 Up +0.32 +0.49%
Digital Realty Tru… CAPS Rating: ****
HCN $65.08 Down -0.24 -0.37%
Health Care REIT CAPS Rating: *****
O $45.94 Down -0.23 -0.50%
Realty Income Corp… CAPS Rating: ****