There are milestones on Wall Street that help to separate the strong companies from weaker ones. A big achievement is increasing annual dividends for 10 consecutive years, which puts a company onto the aptly named Dividend Achievers list.
These four real estate investment trusts (REITs) could make that list in 2022. Here's a quick look at each of them.
1. First Industrial Realty Trust
First Industrial Realty Trust (FR -1.23%) owns about 425 or so industrial properties. The REIT is focused on a hot sector right now, given the growth in online shopping, because it specifically targets distribution and other supply chain-related assets.
Although it has properties in 20 states, it is highly focused on 15 markets (about 88% of rents), with roughly half of its revenues derived from coastal areas. The dividend yield is a bit miserly at 1.8%. That said, the REIT believes it has enough land in its backlog to build 16.3 million square feet of additional space. That would increase its portfolio size by more than 25%, on top of any acquisitions it makes. Value investors might not be interested in First Industrial, but those focused on growth might want to give it a look.
Image source: Getty Images.
2. Getty Realty
Getty Realty (GTY 0.45%) owns just over 1,000 freestanding properties, virtually all of which are related to automobiles. About 75% of its portfolio is tied to convenience store/gas station combinations, 12% are gas station/repair shops, and 10% are car washes (the rest basically falls into "other"). The REIT's dividend yield is a fairly generous 5.6%.
That said, this is hardly a stock that ESG investors (environmental, social and governance) would want to own, given its reliance on carbon-spewing cars. However, shifting to electric vehicles is likely to be a slow process. Even in the best-case scenario envisioned by Bloomberg New Energy Finance, only 44% of cars on the road will be electric by 2040, while the U.S. Energy Information Administration suggests that the number may be well below 10% by then. In other words, there's ample time for Getty Realty to collect rents and, perhaps, shift its portfolio in new directions.
3. Healthcare Trust of America
Healthcare Trust of America (HTA) owns 465 medical office buildings. Roughly 80% of its rents come from the top 20 U.S. markets, with about 90% generated from locations that are either on a medical campus or affiliated with or near one. For the most part, it's in big markets with prime locations.
Although the coronavirus pandemic has been a major headwind for health-care properties tied to senior housing, medical office assets have held up particularly well. And cost-saving efforts in the health-care industry will likely be a major tailwind as more care gets provided outside of hospitals. The REIT also has a sizable portfolio of ground-up construction projects to help internal growth. The dividend yield here is 4.1%.
FR Dividend Yield data by YCharts
4. Medical Properties Trust
Medical Properties Trust (MPW 18.80%) sits at the other end of the health-care spectrum, with a collection of 444 properties across nine countries. Virtually all of its holdings are some variation of a hospital. Roughly 60% of rents come from the U.S., 22% from the U.K., with the rest coming from a smattering of other countries, none of which exceeds 6% of rents.
Although outpatient care is an increasing focus in the health-care sector, Medical Properties Trust highlights that about 31% of U.S.health-care spending is still related to hospitals. For the most part, many things done in a hospital setting can't be easily done elsewhere.
Acquisitions are likely to be the main driver of growth over the long term here. The yield is almost 5%.
Always worth researching
To be fair, every name on this list won't be of interest to investors. For example, the low yield at First Industrial could be a quick turnoff for income-focused investors, while Getty Realty's focus on cars is clearly not ESG-friendly. And while Healthcare Trust of America and Medical Properties Trust are both healthcare REITs, the properties they own are almost diametrically opposed.
Still, reaching Dividend Achiever status is no small feat, and investors might still want to get to know each of these names just the same. Indeed, a market downturn could turn any one of these reliable dividend payers into a far more attractive option, even if you have doubts today.
