Easterly Government Properties (DEA +1.36%) has built a strong business over the years as a REIT for U.S. government properties. In this video clip from "The Rank" on Motley Fool Live, recorded on June 6, Fool.com contributors Matt Frankel and Marc Rapport discuss some of the reasons why it is so stable and continues to perform well.
Matt Frankel: DEA is Easterly Government Properties. They're several times bigger. If the ticker symbol DEA should give it away. They own primarily government properties and primarily it's essentially all. I think 99% of their revenue comes from the U.S. government.
But they own buildings that are leased to various government agencies. I know all four branches of the military lease from them. The Food and Drug Administration is a big tenant of theirs, a lot of different government agencies. Comparable dividend about 5.5%. The postal service REIT is a little bit bigger of a dividend play.
But this is kind of like Marc was talking about, one of those niche REITs that has figured out their lane. They figured out a property that they really know well and they're really good at and that has a large market opportunity and it's pretty stable. If you look at the variance in its stock price over the past 12 months even, it's fluctuated between $23.50 and about $18.
It's a more stable income service, I'd say than the postal service REIT. This is like a bond with upside essentially is how I would think of a stock like this, which is there's nothing wrong with that. Marc, I wonder if this is on your radar at all.
Marc Rapport: It has been, yeah. I was thinking of Easterly while we were talking. When I was talking about postal, to point that one out as another one to consider. No, it's a very good REIT. I would certainly take a look at it. The only difference to me was that the government is a great landlord. They're going to pay their bills or we all have problems. I just felt like Postal really had more upside even right now.
That's the main reason I went with it and that government agencies can be cut more dramatically. I've seen it in Colombia, here in South Carolina where Matt and I live, where you'll see state office buildings and state offices move around a lot. I mean, I just felt more stable, but that's really very gut-feeling between the two. I think you'd be fine with either one.
