There has been no shortage of market volatility through the first three months of this year. After dropping by more than 10% and entering into a correction on Feb. 22, the S&P 500 index has clawed most of the way back.
The index is only 4% off of its 52-week high. But some of the highest-quality dividend stocks are still trading well below their 52-week highs. Let's take a look at three high-yielding real estate investment trusts (REITs) that are still in corrections, which could be great buying opportunities in April.
Image source: Getty Images.
1. Crown Castle International
As you're reading this article, there's a nearly 50% chance that you are doing so on your smartphone. This is supported by the fact that mobile devices accounted for 47.3% of U.S. web traffic in the fourth quarter of last year.
Although its name doesn't reflect it, Crown Castle International (CCI 0.41%) is the largest pure-play cell tower REIT in the U.S. The odds are high that your mobile service is made possible by Crown Castle's infrastructure, which is leased out to major service providers like T-Mobile and Verizon Communications.
Average monthly mobile data consumption per user in North America is set to more than quadruple from 11.8 gigabytes (GB) in 2020 to 49 GB by 2026. Thus, demand for Crown Castle's infrastructure should continue to grow.
This explains why Crown Castle's long-term annual dividend growth target is 7% to 8%. Paired with the stock's market-beating 3.2% dividend yield, this is an attractive mix of yield and growth.
And thanks to the fact that Crown Castle is lumped in with tech stocks, it's nearly 10% off of its 52-week high. Income investors can buy the stock's shares at a valuation of 25 times its adjusted funds from operations (AFFO) per-share midpoint forecast of $7.36 for 2022. This is a reasonable valuation for a stock of Crown Castle's quality and growth prospects.
2. Medical Properties Trust
The next REIT to contemplate purchasing in April is Medical Properties Trust (MPW 2.65%). Medical Properties Trust is one of the largest owners of hospitals in the world, with a $22.3 billion portfolio throughout the U.S. and eight other countries.
Through the first two years of the COVID-19 pandemic, many REITs struggled to maintain their AFFO per share. But Medical Properties Trust managed to increase its AFFO per share at double-digit rates in 2020 and 2021. This is in large part because hospitals rarely close down due to their essential nature within the communities that they serve.
Because Medical Properties Trust estimates that the U.S. hospital real estate market alone is worth $1 trillion, the company should have many years of growth left in its tank. This should fuel mid-single-digit annual dividend increases for the foreseeable future, which is especially enticing considering the stock's market-crushing 5.4% dividend yield.
And with Medical Properties Trust's stock 11% under its 52-week high, investors can snatch up shares at a trailing-12-months price-to-AFFO per- share multiple under 16.
3. STORE Capital
The third stock to think about buying in April is STORE Capital (STOR). The Buffett-backed company owned a $10.7 billion portfolio of nearly 2,900 properties in 49 U.S. states at the end of 2021.
Despite the 6.2% annual dividend growth rate since its 2014 initial public offering (IPO), the stock's dividend payout ratio was just 74% last year. That's because of STORE Capital's 5.5% annual AFFO per share growth rate since its IPO.
Given the ongoing economic reopening, the company anticipates that its AFFO per-share growth will accelerate to about 7.3% in 2022. This should allow strong dividend growth in the future. When combined with the market-smashing 5.2% dividend yield, this makes the stock a particularly appealing option for immediate income and respectable dividend growth.
With the shares 21% off of their 52-week high, the stock's blend of yield and growth can be acquired at a bargain valuation. Investors only have to pay a forward price-to-AFFO per-share multiple of less than 14 to acquire STORE Capital at this time.
