The bear market has been driving stocks down over the past year. However, falling market values have the following benefits: dividend yield rising. This means investors can secure a higher income stream in quality dividend stocks.
3 Big Income Buying Opportunities Emerging Globally bear market that is Alexandria Real Estate Stocks (that is 1.75%), digital reality (DLR 1.70%)When Prologis (PLD 1.26%)Here’s why a dividend-focused investor might want to take advantage of this situation.
1. Alexandria Real Estate Stocks: A Healthy Dividend
Alexandria has lost nearly 30% of its value since the market peaked in early 2022. This will allow real estate investment trusts (REIT) with a dividend yield of over 3%. That’s about double the dividend yield of 1.7%. S&P 500 and come closer Office REITs The highest level in the last 5 years.
While many of its peers in the office sector face headwinds from remote work, Alexandria is focused on owning labs leased to healthcare companies that require in-person work. , relatively unaffected by that trend. Instead of hurting businesses, the pandemic has boosted demand for lab space.
This is evidenced by strong rental growth. New and renewal leases signed last year were 34.3% higher than rents for the same space. Strong demand for lab space also allows REITs to invest in a large pipeline of development projects.After covering dividends, you can easily fund these projects with the cash you have (as low as 56% FFOMore payout ratio) and a balance sheet that ranks in the top 10% of all public REITs.
These catalysts should allow Alexandria to continue to increase its dividend. The REIT has increased its payments by 5% over the past year and has grown at an annual pace of 6.5% over the past five years.
2. Digital Realty: The streak should continue
Digital Realty’s stock has fallen nearly 40% since the market peak last year.that was the driving force data center REITs The dividend yield rose to 4.6%, nearing its highest level since 2016.
Fears of a slowdown in technology spending are weighing on REIT valuations, but we have yet to see a slowdown in demand. The company achieved a new record in the third quarter. This is his third record in the last four periods. This allows us to maintain high utilization rates in our existing data centers and continue to develop new data centers.
The company also continues to see opportunities to expand its global data center portfolio through acquisitions. The company recently acquired a majority stake in South African data center operator Teraco for $1.7 billion.
These growth drivers should allow Digital Realty to continue increasing its dividend. Last year he gave investors his 5% dividend increase, marking the 17th consecutive year of dividend increases. That places us in the elite group of REITs that have increased payouts every year since their initial public offering.
3. Prologis: Further Growth
Since the start of the bear market, Prologis shares have fallen 30%. The sale pushed the dividend yield up to his 2.6%, near the highest in years.
of Industrial REIT Last year was under pressure, but it’s been great for the company again.on the other hand Growth Slows in Q4, it still grew 12.7% FFO per share for the full year. Meanwhile, despite the economic downturn, Prologis expects his FFO per share to increase another 9.5% this year. Given its built-in rent growth and massive development pipeline, it has the potential to continue growing at a healthy rate going forward.
These drivers should allow Prologis to continue increasing its dividend at an above-average pace. The company gave investors 25% of his funding last year, and over the past five years he has grown at a compound annual rate of 12%.
Great opportunity to buy more income
The sale of Alexandria, Digital Realty, and Prologis pushed the dividend yield to its highest level in years. As such, the bear market creates a great buying opportunity for income-seeking investors. They can secure higher yields in these top-notch dividend stocks and may continue to increase their dividends in the future.
Matthew DiLallo has held positions at Digital Realty Trust and Prologis. The Motley Fool US headquarters invests in and recommends Alexandria Real Estate Equity, Digital Realty He Trust, and Prologis. The Motley Fool’s U.S. headquarters has a disclosure policy.
