Federal Reserve Chair Jay Powell laid it out Wednesday, and Wall Street has expected it for some time. The tapering of quantitative easing was doubled, and two and perhaps three interest rate hikes are expected in 2022 and three in 2023. That sounds somewhat ominous, yet coming off a floor of zero to 0.25% interest rates, if all the rate hikes are 25 basis points, or one-quarter of 1%, we are still looking at a federal funds rate of 1.25% to 1.50% by 2023, which historically speaking remains very low.
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The concern for many is that the current white-hot inflation becomes increasingly more painful next year, and with the stock market trading at the highest aggregate price-to-earnings ratio since the late 1990s dot-com bubble, we could be in for some very tough sledding in 2022.

Many across Wall Street feel that the place to be when inflation rears its ugly head is in commodities and real estate, so we screened our 24/7 Wall St. research database to look for Buy-rated stocks in those categories that also paid sizable and reliable dividends. We found six that look very attractive now. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Agnico Eagle Mines

This is one of Wall Street’s most preferred North American gold producers. Agnico Eagle Mines Ltd. (NYSE: AEM) is a senior Canadian gold-mining company that has produced precious metals since 1957. Its eight mines are located in Canada, Finland and Mexico, with exploration and development activities in each of these regions, as well as in the United States and Sweden.

The company and its shareholders have full exposure to gold prices due to its long-standing policy of no forward gold sales. Agnico Eagle has declared a cash dividend every year since 1983. The stock was crushed as gold sold well off the January highs, and with an inflation surge you can bet many savvy portfolio managers are ready to add back top companies like this.

Shareholders receive a 2.87% dividend. The BofA Securities price target is $68.50, but the consensus target is up at $100.25. Agnico Eagle Mines stock closed Wednesday trading at $48.94 a share.

Enterprise Products Partners

This is the largest publicly traded energy partnership and a leading North American provider of midstream energy services to producers and consumers. Enterprise Products Partners L.P. (NYSE: EPD) provides a wide variety of midstream energy services, including gathering, processing, transportation and storage of natural gas, natural gas liquids fractionation, import and export terminaling, and offshore production platform services.

One reason many analysts like the stock might be its distribution coverage ratio. This ratio is well above 1 times, making it relatively less risky among the master limited partnerships.

Enterprise Products Partners stock investors receive an 8.71% distribution. Goldman Sachs has a price target of $26. The consensus target is $28.38, and shares closed at $20.93 on Wednesday.

Shares of this mega-cap energy leader backed up nicely as oil sold off recently, and they still offer investors an excellent entry point. Exxon Mobil Corp. (NYSE: XOM) is the world’s largest international integrated oil and gas company. It explores for and produces crude oil and natural gas in the United States, Canada, South America, Europe, Africa and elsewhere.
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Exxon also manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and specialty products, and it transports and sells crude oil, natural gas and petroleum products.

The company announced last month that ExxonMobil Catalysts and licensing has introduced ExxonMobil Renewable Diesel (EMRD) process technology to help meet the evolving needs for mobility, while utilizing renewable feedstock. This new process technology converts feedstocks including, but not limited to, vegetable oils, unconverted cooking oil and animal fats, into renewable diesel. Due to significant interest in producing renewable jet fuel as a primary product, Exxon is also developing advanced catalyst and process technology solutions that will offer EMRD process licensees flexibility to tailor the amount of jet fuel versus diesel produced.

The company pays a 5.84% dividend, which will continue to be defended. The $95 BofA Securities price target is well above the $72.07 consensus target on Exxon Mobil stock. The closing share price of Wednesday was $61.27.

Medical Properties Trust

This stock may offer investors among the best values at current price levels. Medical Properties Trust Inc. (NYSE: MPW) acquires, develops and invests in health care facilities and leases health care facilities to health care operating companies and providers. The company also provides mortgage loans to health care operators, as well as working capital and other term loans to its tenants/borrowers.

With a growing portfolio and a versatile business model, the company continues to rank high across Wall Street. The analysts noted that the company’s acute care hospitals rent coverage increased nicely and the company attributed the increase to better cost controls and higher patient admissions.

Shareholders receive a 5.16% distribution. Deutsche Bank has a Wall Street high $27 price target for Medical Properties Trust stock. The consensus target is $24.43, and shares closed on Wednesday at $22.02.

MGM Growth Properties

This company is a triple net lease real estate investment trust (REIT) formed in April 2016 when it was spun out of MGM Resorts. MGM Growth Properties LLC (NYSE: MGP) is one of the leading publicly traded REITs engaged in the acquisition, ownership and leasing of large-scale destination entertainment and leisure resorts with diverse amenities including casino gaming, hotel, convention, dining, entertainment and retail offerings.

The company, together with its joint venture, currently owns a portfolio of properties, consisting of 12 premier destination resorts in Las Vegas and elsewhere across the United States; MGM Northfield Park in Northfield, Ohio; Empire Resort Casino in Yonkers, New York; as well as a retail and entertainment district, The Park, in Las Vegas.
The destination resorts collectively comprised approximately 27,400 hotel rooms, 1.4 million casino square footage, and 2.7 million convention square footage. As a growth-oriented public real estate entity, the company expects its relationship with MGM Resorts and other entertainment providers to position the company attractively for the acquisition of additional properties across the entertainment, hospitality and leisure industries.

Shareholders receive a 5.59% dividend. Deutsche Bank has set a $43 price target. The consensus target for MGM Growth Properties stock is $40.75. The stock closed at $37.57 on Wednesday.
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W.P. Carey

This is another large triple net lease REIT with an incredible distribution for income buyers. W.P. Carey Inc. (NYSE: WPC) ranks among the largest net lease REITs, with an enterprise value of approximately $18 billion and a diversified portfolio of operationally critical commercial real estate that includes 1,215 net lease properties covering approximately 142 million square feet, as of September 30, 2020.

For nearly five decades, the company has invested in high-quality single-tenant industrial, warehouse, office and retail properties subject to long-term leases with built-in rent escalators. Its portfolio is located primarily in the United States and northern and western Europe, and it is well diversified by tenant, property type, geographic location and tenant industry.

Net lease REITs generally rent properties with long-term leases (10 to 25 years) to high credit-quality tenants, usually in the retail and restaurant spaces. “Net lease” refers to the triple-net lease structure, whereby tenants pay all expenses related to property management: property taxes, insurance and maintenance.

Investors receive a 5.35% distribution. The Wells Fargo price target is $90. The consensus target is $86.13. W.P. Carey stock closed at $79.78 a share.

Six top companies that all pay dependable dividends and distributions. With the prospect of continued low but rising interest rates for the foreseeable future, and the stock market extremely risky and overbought, it makes sense to have solid assets like real estate and commodities. It is important to remember that REIT distributions can contain return of principal.

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