The stock market has endured several sell-offs over the past year. While it may be making a steady stride toward recovery, eventually there will be another market dip.
Sell-offs are a fantastic time to increase your chances of making money, especially for long-term investing. If you're looking to take advantage of a market sell-off, here are three stocks under $100 that are great to buy and hold forever.
Unparalleled track record with unmatched size
Realty Income (O 0.67%) is one of the most loved dividend stocks today. Holding the prestigious title of a Dividend Aristocrat and being one of the few monthly-paying dividend real estate investment trusts (REITs), it's got a lot going for it in terms of long-term investment.
The company, which owns and leases a diverse mix of commercial real estate, is the largest net lease REIT in the industry, having interest and ownership in over 11,400 properties across the globe and a market cap of $4.6 billion. Having such a massive footprint with such an incredibly diverse portfolio makes it the perfect buy-and-hold stock because it's able to deliver consistent growth while paying extremely reliable and attractive dividends.
Right now, its dividend yield is just under 4% and it's boasting a safe payout ratio of 72% of its funds from operation (FFO). Plus it's got a superb balance sheet, with debt ratios in line with the REIT average, around 5.2 times its earnings before interest, taxes, depreciation, and amortization (EBITDA), and $3 billion in liquidity which gives it a lot of money to fund further expansion.
Dominating city living
Equity Residential (EQR 0.82%) is one of the premier residential REITs focused on acquiring and developing high-end apartments in 12 major urban cities. City living took quite the hit during early stages of the COVID-19 pandemic as many residents sought more spacious and affordable living. However, many cities are now making a big comeback, which has boosted earnings over the past year for Equity Residential's 311 properties. Its blended lease rate, which includes new and renewing leases, grew by 14% year to date, while occupancy sits at a very healthy 96.9%.
There is a growing concern over recessionary impacts on rental housing, which has caused its share price to fall as of late. But long-term investors know to look past short-term headwinds, instead looking toward the long-term demand for the industry. Rental housing plays an essential role in our society. And while real estate markets and the demand for rental housing do change, city living will remain appealing for many.
The company is also proactively expanding its portfolio into the Sun Belt, one of the fastest-growing regions of the United States right now, which should help it offset any losses incurred from changing demographics from bigger coastal cities. The REIT recently increased its dividend and currently pays just over 3%.
Investing in the silver tsunami
Welltower (WELL 0.33%) is a healthcare REIT that owns and leases senior housing facilities. The last few years were extremely hard on the company. Pandemic-related impacts, especially on the demographic it serves, sent its stock tumbling. Share prices still sit around 8% below pre-pandemic levels.
However, earnings this year are showing promising signs that the worst could be over. Its last quarter was strong with net operating income (NOI) growing by 15.4% and revenue jumping 11% since last year. In July, net hiring -- which has been a major challenge for the healthcare community -- was nearly equal to the net hires for the entire first six months of the year.
Welltower certainly has a long way to go until it's fully recovered from the effects of COVID-19, but its short-term comeback isn't what makes it a great long-term buy. The real value in Welltower is what's coming in the next few decades.
By 2060, the number of people aged 65 and older is expected to be around 95 million, growing from roughly 16% of the U.S. population today to 23%. And there's nowhere near enough housing to meet the growing need. Welltower's diverse portfolio of senior-focused housing allows it to serve the aging population in the decades to come.