The stock market has been weighed down by a plethora of bad news and challenges lately, including soaring inflation and interest rates, supply chain uncertainty amid a lingering pandemic and the war in Ukraine, to name a few. Safe havens from this financial storm seem few, as even the most reliable publicly traded stocks have suffered severe declines.
At least for now.
The long arc of history, at least as far as US stock markets are concerned, shows that what goes down will eventually come up, and now is the time to look for future winners.
A good place to start this research might be with these four real estate investment trusts (REITs) that have impressive records of beating the S&P500 in total return over the years. They also have current portfolios that should continue to generate dividend income during this downturn and are in sectors that should help pave the way when silver starts to return to the market in sufficient volume to drive prices up again. .
They are equinix (EQIX 4.75%) in data centers, logistician First Industrial Real Estate Trust (FR 2.65%)mobile infrastructure specialist International Crown Castle (ICC 2.58%)and self-storage giant Extra space storage (EXR 2.43%).
Conventional investing wisdom holds that simply buying an S&P 500 index fund and sticking with it will create more wealth than the average investor can choose on their own. But these are not just average performers. Over the past 10 years, the S&P 500 has returned 258.6%. Extra Space Storage nearly tripled that and the other three also easily topped this major market index.
Four exceptional REITs in their respective fields
Equinix is one of the few non-acquired data center owners, and it is the largest such REIT, with more than 220 facilities in more than 60 markets on five continents. It has also increased its dividend for seven consecutive years and now yields around 1.98%.
Extra Space Storage hides money from a growing portfolio of 2,130 stores, making it the second-largest self-storage owner/operator and third-party management company in the nation. Its stock is now yielding about 3.54% after 14 consecutive years of dividend increases, including a 10.23% increase in the past three years.
Crown Castle is the second largest owner of mobile towers in the United States and is moving strongly into small node networks and the fiber optic cable infrastructure needed to capitalize on the growth of 5G networks. Crown Castle has increased its payout by 8.5% over the past three years, good for a current yield of around 3.35%.
First Industrial has a portfolio of 434 buildings in key distribution centers across the country, serving nearly 1,000 customers in hot warehouse space, and has increased its dividend for nine consecutive years, including by 7.47% over the past three, and is now yielding about 2.27%.
Beaten brands attract purchases
These four stocks are currently battered even more than the S&P 500, which is down around 17% so far in 2022. Crown Castle’s share price is down around 17% since the start of the year, followed by First Industrial at 21%, Extra Space Storage at 22% and Equinix at 25% at the time of writing.
For me, these are buying opportunities. These four REITs exhibit many of the characteristics of a buy-and-hold company, including large and growing addressable markets and moats around their businesses.
They also each have portfolios and strategies in place that give confidence that they will resume their market beating habits once the overall market begins its own rally. This tide, of course, will lift most boats, and these companies are likely to once again rise above the crowd.