Real estate investment trusts, or REITs, make excellent retirement investments, thanks to their high yields and favorable tax structure. However, some look especially attractive right now. In this Fool Live video clip, recorded on Jan. 21, Fool.com contributors Matt Frankel and Jason Hall discuss why they think EPR Properties (EPR 0.40%) and STORE Capital (STOR) could make excellent investments in your Roth IRA.
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Matt Frankel: Alex says, ''Hi, are there are any good REITs for growth and income in a Roth IRA?'' My short answer is all of them. If you don't want to do any guesswork, the Vanguard Real Estate ETF (VNQ 0.09%), VNQ is a great one. If I had extra money in a Roth IRA right now, there are a couple in particular, I would look at. EPR is one of my favorites right now. The new COVID wave, it's going to be a short-term thing. I think pretty much every expert agrees this one's going up and then down. Because of that, they are investing in experiential properties and it's just investor fears and just uneasiness about the situation.
They've really pulled back in the past couple of weeks. Great balance sheet, great management team. They are the only REIT that's solely focused on the space. They're planning to invest heavily over the next few years in things like gaming properties, golf attractions, TopGolf is one of their big tenants. Ski resorts, Vail Resorts (MTN 0.09%) is one of their big tenants. They pay monthly dividends, and because the stock price is pulled back, it's almost 7% yield right now. That's one that is a great fit for any type of tax advantage account just because of the high and sustainable dividend yield.
The core holding of my personal Roth IRA is Realty Income (O -0.37%). Ticker symbol is O. That was the first real estate investment trust I ever bought. I think there's still a lot of room to grow. They have an unbeaten track record in the space of creating value without volatility. Go ahead.
Jason Hall: I'll toss another one in there too. I think STORE Capital is so underappreciated right now. STORE Capital ticker S-T-O-R, focus on relatively e-commerce resistance, real estates, lots of really large tenants that actually a lot of them know they have their own assets if they flip and they sell to STORE Capital, and then they sign lease, so they do the sale leaseback deals, then they lease those properties back over long-term deals.
I was just looking at the stock and I've been thinking about it recently, and here's what's happened. The stock price over the past five years, obviously this is the coronavirus crash, but it's still down 25%. It's fallen more than 10% just in the past month or so. As a result, the dividend yield is almost 5% again. It's 4.85%, and the dividend is super safe. It's very secure, there's no risk to the business. Their spaces are leased, their tenants are paying, they're growing their business. I think now is a really good opportunity to buy STORE Capital. I love it.
Frankel: There are a few concerns with every investment. I wouldn't say they're all risk-free, but the ones we mentioned are very sustainable and resilient, I guess is the right word.
Hall: Absolutely, yes because it's fallen by 12% in the past six weeks. It could keep falling. It certainly could. But I think if you own it for five years, 10 years, 20 years in a REIT, you're going to be quite happy you own it.