Despite all the chatter about rising interest rates, and there is no doubt they are going higher, this still isn’t a world built for investors looking for income. The 30-year Treasury bond yields a paltry 3.07%, and while the payments are guaranteed, that is an awfully long debt obligation. For income investors there is a much better solution: look for real estate investment trusts (REITs) that have reliable dividends that can be maintained and even grow over time.

A series of new reports from Jefferies does a deep-dive on the REIT sector looking for companies that can offer income-oriented accounts consistent dividend payouts. They noted this:

When you speak with Income investors they don’t like it hot. A dividend yield north of 7% and they panic that a cut is around the corner and the yield is artificial. To solve for this problem, our REIT team has looked at stocks with strong dividend growth that has historically been a strong indicator of stock performance (75% correlation over the past 15 years). In their analysis of 139 REITs, they identified companies that had a safe dividend policy and could drive growth.

Four top companies are highlighted, and each one is rated Buy at Jefferies.

Crown Castle International

This top tower stock offers incredible growth and income possibilities. Crown Castle International Corp. (NYSE: CCI) is one of the largest U.S. wireless tower companies, with over 40,000 towers across the country. Its core business is leasing space on its wireless towers primarily to wireless carriers, government agencies and broadband data providers.

The company recently announced its intention to acquire private fiber company Lightower for $7.1 billion. Wall Street applauded the purchase, with most analysts citing the accretive transaction as a huge positive for the company’s growth metrics. SunTrust feels that the company could grow 2018 EBITDA by 8.7%, versus the current 6.7% estimate, and that excludes the Lightower numbers.

Jefferies cites the sector-high dividend and the growth potential as healthy wireless investment is expected while carriers look to densify their network (all four carriers are adding new spectrum).

Investors receive a 3.83% distribution. The Jefferies price objective for the shares is $120, while the Wall Street consensus estimate is $116.67. Shares closed Thursday at $109.80.

Corporate Office Properties

Increased Defense Department spending could prove to be a huge boon for this company. Corporate Office Properties Trust (NYSE: OFC) is a leading owner and developer of high-security office buildings and data centers leased to government and contractor tenants.

Its portfolio is clustered around the largest defense-information technology installations for the U.S. government in Maryland, Virginia, Alabama and Texas. The company also owns a portfolio of traditional office assets in Virginia, Maryland and Washington, D.C., with a concentration in central business district in Baltimore.

Rising defense spending looks to be huge going forward, and the analysts noted this:

We believe the market is underappreciating this jump in spending and its positive impact on future growth potential. With a well-funded Defense Department, we expect more build-to-suit developments, demand for vacant space, and an increase in market rents. We expect earnings acceleration will begin in 2019, and believe that the company is one of the few REITs that is well poised for accelerating earnings growth.

Investors receive a 4.14% distribution. Jefferies has a $34 price objective, and the consensus target price is $29.18. Shares closed at $26.57.

Simon Property

Simon Property Group Inc. (NYSE: SPG) invests in the real estate markets across the globe. It engages in investment, ownership, management and development of properties. It primarily invests in regional malls, premium outlets and community/lifestyle centers to create its portfolio.

Through its subsidiary partnership, it owns or has an interest in about 230 properties in the United States and Asia. The company also has a 28.9% interest in Klepierre, a European REIT with over 260 shopping centers in 13 countries.

Despite the increasingly difficult retail environment, Jefferies remains positive, noting this:

We continue to believe that the solid competitive position of SPG should still lead to about 4.5% to 5.0% funds from operations /per share annual growth over the next 3 years (down from high single digits/low double digits growth). A key driver of growth will include the $1.0 billion+ of development/redevelopment planned over the next few years. We also believe that the company’s high quality portfolio is weathering the retail storm better than most.

Shareholders receive a 4.73% distribution. The $186 Jefferies price target compares to a consensus price target of $185.33. Shares closed at $155.55.

CubeSmart

This company has posted some very solid numbers and remains a compelling buy. CubeSmart (NYSE: CUBE) is a self-administered, self-managed real estate investment trust (REIT) focused on the leasing, management, acquisition and selective development of self-storage facilities.

While the company’s solid growth may be ready to slow going forward, the analysts remain positive:

Although revenue, growth is set to moderate in 2018, we remain positive on the company’s medium-term prospects given the high-quality management team and platform, growing third-party management business and exposure to attractive long-term markets. We definitely believe 5.0%-5.5% funds from operation/per share growth is sustainable over the next three years, and with the adjusted funds from operations/ per share payout ratio at 72.2%, CubeSmart still has decent runway to grow the dividend over this period.

Shareholders receive a 4.22% distribution. The Jefferies price objective is $32. The consensus target is $29.20, and shares closed at $28.50.

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Four solid companies with payouts close to or over 4% that look to be able to maintain and grow their payouts to shareholders. It is important to remember that REIT distributions can contain return of principal. With that in mind, those looking for solid and reasonably safe income have four good stocks to choose from.

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