Famed mutual fund manager Peter Lynch gets the credit for popularizing "Buy what you know" as a mantra for successful stock picking.
The idea is that you buy and sell (at a profit and after a nice holding period) companies that you understand rather than trying to time the market or stay ahead of fast-changing trends and fads.
Real estate investment trusts (REITs) lend themselves to that strategy. They own and operate income-producing properties and are required to pay out at least 90% of their taxable income to shareholders.
That gives you a fairly predictable flow of passive income from investing in real estate without the hassle of direct ownership. Simple, right? Casino owner Vici Properties (VICI -0.28%) and retail landlord Agree Realty (ADC -0.48%) are two particularly good options for that $2,000 you might have sitting there waiting to invest.
Data source: YCharts
The chart above shows how Agree Realty and Vici Properties have performed in total returns since Vici's 2018 initial public offering (IPO) against the greater market as represented by the S&P 500.
But Agree has been around much longer, and since going public in 1994 has generated a total return of about 2,500% compared with about 1,600% for the big index. And there's more to come.
Agree Realty: Monthly dividends from a longtime outperformer
Agree Realty is a Detroit-based owner and operator of 42 million square feet of commercial real estate with a presence in every state but Hawaii. The company's client list is impressive and reliable, with 68% of rent flow from investment-grade tenants such as Walmart, Kroger, Dollar General and Tractor Supply Company.
This highly regarded retail REIT also is using its rock-solid financials to take advantage of good opportunities and just passed the 2,000 mark in properties owned while raising its estimate for 2023 acquisitions to at least $1.3 billion.
That growth, and a portfolio that's 99.7% occupied, should help Agree continue to raise its dividend at the 6%-a-year pace it's maintained for the past decade. An added bonus for income investors: Agree pays monthly. And it's currently yielding a nice 4.7%.
Vici Properties: A powerhouse in the entertainment space
Vici Properties may not be that well-known beyond the investing world, but its flagship Las Vegas properties sure are: Caesars Palace, MGM Grand, and the Venetian Resort.
They're among the 50 entertainment properties that Vici owns across the U.S. and Canada in a 124-million-square-foot portfolio that also includes about 60,300 hotel rooms, 450 restaurants, bars and nightclubs, and four championship golf courses.
Vici Properties was taken public early in 2018 as a way for Caesars Entertainment (CZR -3.76%) to raise cash from its casino properties, and it's become a way for investors to raise some cash themselves. This hospitality REIT is now yielding about 5% after bumping up its dividend every year so far in its young life.
Two simple stocks for a growing portfolio
People are going to keep shopping for essentials and going to casinos. These are resilient industries, and Vici Properties and Agree Realty are proven players with the chops to keep providing steady income and attracting investor dollars that drive share growth, too.
That's a simple formula for long-term growth and it makes these two safe REITs smart choices for a $1,000 investment each. Your $2,000 stake should grow nicely in the years to come.
