Most investors were thrilled to see 2022 come to an end, as it was one of the worst years for stocks since the turn of the century. Rising interest rates (which once again moved higher in December and are likely to go higher later this month with another 50- or 25-basis-point hike) have been one of the major headwinds for stocks. It has been especially difficult for real estate investment trusts (REITs), some of which are very vulnerable to rising rates.
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The good news is the rate increases are close to being complete, after December’s hike pushed the federal funds rate to 4.25% to 4.50%. Given that the expected terminal rate is 5.00% to 5.25%, the Federal Reserve seems close to being done. That bodes well for REITs, especially those that are not as exposed to rate increases.

We screened our 24/7 Wall St. REIT universe looking for companies that paid big dividends but were not as affected by rising rates or a slowing economy. Top companies in gaming, apartments, document storage and other areas offer a degree of safety and reliable dividends. We found five stocks that are rated Buy across Wall Street for growth and income investors to consider. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Apartment Income REIT

The name says it all here, and this big-dividend stock is a great idea for those seeking higher income with growth potential. Apartment Income REIT Corp. (NYSE: AIRC) is focused on the ownership and management of quality apartment communities located in the largest markets in the United States.

This REIT is one of the country’s largest owners and operators of apartments, with 74 communities in 11 states and the District of Columbia. As of September 30, 2022, it held unencumbered apartment communities with an estimated fair market value of approximately $8.3 billion, almost triple the amount from December 31, 2020.

Investors receive a 5.25% distribution. The Goldman Sachs target price is $43, while the consensus target is $41.00. The stock closed almost 4% higher on Wednesday at $36.16.

Gaming and Leisure

This stock is a unique and interesting way to play the gaming sector and generate income. Gaming and Leisure Properties Inc. (NASDAQ: GLPI) is engaged in the business of acquiring, financing and owning real estate property to be leased to gaming operators in triple-net lease arrangements.
Under such arrangements, the tenant is responsible for all facility maintenance, insurance required in connection with the leased properties and the business conducted on the leased properties, taxes levied on or with respect to the leased properties and all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties.
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The company expects to continue to grow its portfolio by pursuing opportunities to acquire additional gaming facilities to lease to gaming operators. They also intend to diversify the corporate portfolio over time, including by acquiring properties outside the gaming industry to lease to third parties. The company’s current portfolio consists of 44 casinos, including two TRS properties and the real property associated with 42 facilities spread around the United States.

Shareholders receive a 5.66% distribution. Truist Securities has a $60 price target. The consensus target is lower at $55.82, and Wednesday’s close at $52.98 was up close to 4% on the day.

Getty Realty

Despite climate change concerns, people still need gasoline for their cars, trucks and vans, and gas stations still provide that basic need. Getty Realty Corp. (NYSE: GTY) is a publicly traded, net lease REIT specializing in the acquisition, financing and development of convenience, automotive and other single-tenant retail real estate. As of March 31, 2022, the company’s portfolio included 1,014 properties in 38 states and the District of Columbia.

With big footprints in both Texas and California, the company serves some of the most populated regions of the country, and it posted strong first-quarter results with funds from operations surpassing Wall Street expectations.

Getty Realty stock comes with a 5.02% distribution. The $37 JMP Securities target price compares with the $33.29 consensus target and Wednesday’s close at $35.48, which was up 3% for the day.

Iron Mountain

Many businesses turn to this company to store data or documents. Iron Mountain Inc. (NYSE: IRM), founded in 1951, is the global leader in secure storage and information management services.

Trusted by more than 225,000 organizations around the world, and with a real estate network of more than 90 million square feet across approximately 1,450 facilities in approximately 50 countries, Iron Mountain stores and protects billions of valued assets, including critical business information, highly sensitive data and cultural and historical artifacts.
Iron Mountain’s solutions include secure records storage, information management, digital transformation and secure destruction, as well as data centers, cloud services and art storage and logistics. Iron Mountain helps customers lower cost and risk, comply with regulations, recover from disaster and enable a more digital way of working.

Investors receive a 4.88% distribution. Iron Mountain stock has a $60 price target at Evercore ISI. The $55.75 consensus target is closer to Wednesday’s closing print of $51.53, a gain of nearly 3% on the day.
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VICI Properties

This is the top pick across Wall Street in the net lease group, and it is an ideal pick for investors who are more conservative and looking for gaming exposure. VICI Properties Inc. (NYSE: VICI) is a triple net lease REIT that was spun out of Caesars Entertainment post-bankruptcy. It  has 23 mixed-use gaming, lodging and entertainment properties in its portfolio, and a subsidiary that owns four championship golf courses. The company also owns roughly 34 acres of undeveloped land in Las Vegas, which it leases to Caesars.

Much of the focus has been on VICI’s acquisition of the real estate of the Venetian Resort in Las Vegas, with Apollo as a new tenant. Looking ahead, many on Wall Street are very positive on VICI’s embedded growth pipeline with Caesars Entertainment, including a put/call on the Centaur properties in Indiana (starting in January) and a right of first refusal on a strip asset sale for Caesars, which could occur soon after a full earnings before interest, taxes, depreciation, amortization and restructuring or rent costs recovery.

In addition, the company closed a $17.2 billion deal last April to buy out rival gaming REIT MGM Growth Properties, which owns the real estate of 15 casinos and resorts in eight states, including seven properties on the Las Vegas Strip. All of MGM Growth’s properties are operated by MGM Resorts International.

Shareholders receive a 4.91% distribution. Citigroup’s $39 target price is higher than the $37.76 consensus target. VICI Properties stock closed almost 4% higher on Wednesday at $33.54.

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These top REITs all have been hit by the move higher in interest rates and the large-scale selling all across Wall Street last year. These sector heavyweights are leaders in their specific REIT subsectors, and they offer multiple ways for investors to get steady growth and be paid substantial dependable income. It should be noted all were up Wednesday as investors are warming up to the group again.

Due to their big rate sensitivity, we avoided the super-high-yielding mortgage REITs. Lastly, while they rallied some during the move higher in the fall, all these stocks have been hit reasonably hard, offering the best entry points in well over a year. They give growth and income investors a contrarian hedge against continued, and almost guaranteed, future inflation.

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