Real estate investment trusts (REITs) are a natural fit for a slow but steady investing approach. They own portfolios of income-producing assets and are required to pay out in dividends at least 90% of their taxable income, and the good ones won't make you a millionaire overnight, but they'll nicely pad your portfolio for years to come.
That's because REITs provide the benefits of real estate investing itself -- including buffering inflation by raising rents and the appeal of passive income -- with the liquidity and ability to easily diversify that comes with buying and selling publicly traded stocks.
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Three you might want to consider now are retail REIT Agree Realty (ADC 0.63%), mobile tower owner Crown Castle International (CCI +2.75%), and logistics giant Prologis (PLD 0.19%).
The chart below shows their movement against the S&P 500 since 2007, the year before the real estate convulsions that began with the Great Recession.
ADC Total Return Level data by YCharts
Agree Realty defies gravity while the rents keep rising
Agree Realty stock is pretty much unchanged year to date, which is impressive in and of itself. So is its long-term record. Richard Agree started the Detroit-based company in 1971 and developed more than 40 shopping centers primarily in the Midwest and Southeast before taking it public in 1994.
Since then, Agree's company has provided a compound average annual return of 12.5%. Annualized dividend growth of 5.5% over the past 10 years adds the allure, and the current yield is about 4.1%, well more than the average REIT and even more impressive considering the yield isn't pushed up by a beaten-down share price.
NYSE: ADC
Key Data Points
Agree already has a portfolio of 1,510 properties in 47 states, retail centers anchored primarily by investment-grade big-name tenants who reliably pay the escalating rent. And after buying 290 sites in 2021, the company plans to plunk down up to $1.3 billion this year on more properties.
Crown Castle International is building a domestic fortress
A moat around your business is considered a sign of strength for any enterprise, and Crown Castle International is building a new one.
With about 40,000 towers, Houston-based Crown Castle is already one of the big three operators in that space, and it's now focused on establishing itself as the clear leader in next-generation small-cell nodes that will support the surging rollout of local 5G networks across the country.
NYSE: CCI
Key Data Points
The company already has a backlog of more than 60,000 of those small-cell sites to install and, along with growing the network, expects to grow its dividends by 7% to 8% a year at the same time. That would build on a record of seven straight years of dividend hikes that now has this stock yielding about 3.1%.
Prologis plunges, but its prospects are promising
On its "what we do" website landing page, Prologis makes one thing clear: "We acquire, develop, and maintain the largest collection of high-quality logistics real estate in the world."
This San Francisco-based behemoth backs up that claim with a portfolio of about a billion square feet of warehouse space scattered across 19 countries on four continents that serve about 5,800 customers in an industry that is seeing unprecedented demand. It's also maintaining a yield of about 2.6% after nine straight years of raising its dividend, including by about 9.5% in the past three.
NYSE: PLD
Key Data Points
With that demand for space comes the ability to raise rents when it can, especially important in these inflationary times, and the temptation to expand by acquisition. Prologis did that by making a pass at competitor Duke Realty, which didn't go well and helped contribute to the big REIT's steep stock plunge of late.
But with its size and scale, diversity across markets, and an array of real estate services that serve the sector beyond simply renting the space, Prologis seems likely to continue its appeal as a buy-and-hold for years to come.
ADC Total Return Level data by YCharts
These three stocks are no-brainers today
The chart above shows what's happened so far this year to each of these stocks and the two indexes. But keep in mind that these are not growth stocks. They're growth and income stocks offered by companies that have withstood some serious market downturns with relative aplomb and are positioned to sustain that stable performance for years to come. It doesn't take a lot of brains to see the value in that.
