After an incredible run for the S&P 500 in 2023 and 2024, many across Wall Street feel that the momentum can carry through to 2025. After two years of 20+ gains, history says the odds for a continued move higher are good. One of the sectors that took off last summer but retreated as yields moved higher was the real estate investment trust (REIT) stocks. As rates stabilize and trend lower this year, there is a good chance they will be back in favor.

The top market strategist at BTIG Research feels that after a strong move higher last year, then a pullback, REITs have the potential for another leg up. They noted this in a recent research piece:

A Second Chance for REITs. In July, we suggested REITs were poised for ~8% upside. They achieved that move by September and have subsequently retraced back to that breakout point. If you missed the move the first time, they are providing a second chance here.

We screened our 24/7 Wall St. REIT research database, looking for companies that pay among the highest yields and offer solid growth potential. We purposely avoided the mortgage REIT segment, as it tends to be more volatile and sensitive to interest rates. Five top companies are our top ideas for 2025, and all are Buy-rated by some of the top firms on Wall Street.

Why do we cover real estate investment trusts?

An adage on Wall Street referring to real estate attributed to Mark Twain says, “Buy land; they’re not making it anymore.” While somewhat simplistic, it’s true, and real estate has long been a staple investment for some of the wealthiest and brightest investors in history.

Apple Hospitality REIT

Apple Hospitality REIT Inc. (NYSE: APLE) is a publicly traded real estate investment trust that pays a solid 6.15% dividend and stands out in the market with its unique offering.

Despite its name, Apple Hospitality is not affiliated with the technology giant. However, it offers solid total return potential, owning one of the largest and most diverse portfolios of upscale, room-focused hotels in the United States.

Apple Hospitality’s portfolio comprises 220 hotels with over 28,900 guest rooms in 87 markets throughout 37 states and one property leased to third parties.

Concentrated on industry-leading brands, the company’s hotel portfolio comprises:

• 100 Marriott-branded hotels
• 120 Hilton-branded hotels
• Five Hyatt-branded hotels

EPR Properties

This REIT invests in some of the most popular entertainment companies and pays a solid 7.85% dividend. EPR Properties (NYSE: EPR) is a leading experiential net lease real estate investment trust (REIT) specializing in select enduring experiential properties in the real estate industry.

The company focuses on real estate venues that create value by facilitating out-of-home leisure and recreation experiences where consumers spend their time and money.

EPR Properties has nearly $6.7 billion in total investments across 44 states. It adheres to rigorous underwriting and investing criteria centered on key industry, property, and tenant-level cash flow standards. Senior management believes its focused approach provides a competitive advantage and the potential for stable and attractive returns.

Realty Income

This is an ideal stock for growth and income investors looking for a safer contrarian idea for the rest of 2024 that pays a whopping 6% dividend. Realty Income Corp. (NYSE: O) is an S&P 500 company that provides stockholders with dependable monthly income.

The company is structured as a REIT, and its monthly dividends are supported by the cash flow from over 15,540 real estate properties (including properties acquired in the Spirit merger in January 2024) owned under long-term lease agreements with commercial tenants.

Realty Income has declared 649 consecutive common stock monthly dividends throughout its 55-year operating history and increased the dividend 123 times since Realty Income’s public listing in 1994. For increasing the dividend for the last 29 consecutive years, it is a top real estate member of the S&P 500 Dividend Aristocrats index.

 Starwood Property Trust

This high-yielding company, run by real estate legend Barry Sternlicht, offers big-time total return potential and a 9.90% dividend. Starwood Property Trust Inc. (NYSE: STWD) operates as an REIT in the United States, Europe, and Australia.

It operates through four segments:

• Commercial and Residential Lending
• Infrastructure Lending
• Property
• Investing and Servicing segments

The Commercial and Residential Lending segment:

• Originates, acquires, finances, and manages commercial first mortgages
• Non-agency residential mortgages
• Subordinated mortgages
• Mezzanine loans
• Preferred Equity
• Commercial mortgage-backed securities (CMBS)
• Residential mortgage-backed securities

The Infrastructure lending segment originates, acquires, finances, and manages infrastructure debt investments.

The Property segment primarily develops and manages equity interests in stabilized commercial real estate properties, such as multifamily properties and commercial properties subject to net leases, that are held for investment.

The Investing and Servicing segment:

• Manages and works out problem assets
• Acquires and contains unrated, investment grade, and non-investment grade rated CMBS comprising subordinated interests of securitization and re-securitization transactions
  Originates conduit loans to sell these loans into securitization transactions and acquire commercial real estate assets, including properties from CMBS trusts

VICI Properties

This is one of the top picks across Wall Street in the net lease group. It is ideal for more conservative investors looking for gaming exposure and a solid 6.01% dividend. VICI Properties Inc. (NYSE: VICI) is an S&P 500 experiential real estate investment trust with one of the largest portfolios of market-leading gaming, hospitality, and entertainment destinations, including three iconic entertainment facilities on the Las Vegas Strip.

• Caesars Palace Las Vegas
• MGM Grand
• The Venetian Resort Las Vegas

VICI Properties owns 93 experiential assets across a geographically diverse portfolio of 54 gaming properties and 39 other experiential properties across the United States and Canada. The portfolio comprises approximately 127 million square feet. It features approximately 60,300 hotel rooms and over 500 restaurants, bars, nightclubs, and sportsbooks.

Its properties are occupied by industry-leading gaming, leisure, and hospitality operators under long-term, triple-net lease agreements. VICI Properties has a growing array of real estate and financing partnerships with leading operators in other experiential sectors
including:

• Bowlero
• Cabot
• Canyon Ranch
• Chelsea Piers
• Great Wolf Resorts
• Homefield
• Kalahari Resorts

VICI Properties also owns four championship golf courses and 33 acres of undeveloped and underdeveloped land adjacent to the Las Vegas Strip.

Four High-Yield Stocks With 7% and Higher Dividends Are 2025 Home Runs

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.