3 REITs That Deliver High Yields And Have More Upside

Real estate investment trusts make it easy to invest in real estate. These assets give you exposure to various properties without any of the work. REITs also pay out higher yields than most S&P 500 stocks, and despite those high yields, some REITs can still deliver elevated gains for investors.

Digital Realty Trust (DLR)

Digital Realty Trust (NYSE:DLR | DLR Price Prediction) holds more than 300 data centers in 50 cities and works with 5,000 customers. Data centers are surging in demand due to AI demands, and with big tech looking to spend even more money on this technology, Digital Realty Trust should continue to ride the tailwinds.

The company has boosted revenue for 20 consecutive years and left no doubt in investors’ minds that this streak would continue. Digital Realty Trust’s Q3 results showcased 10% year-over-year revenue growth while delivering $64 million in net income, which is an improvement from $58 million in the same quarter last year.

The stock offers a 3% yield and is up by 13% over the past five years. AI tailwinds may result in accelerated long-term gains.

Stag Industrial (STAG)

Stag Industrial (NYSE:STAG) owns warehouses across 41 states. Its 601 buildings take up 119.2 million square feet, giving it a lot of space to rent to big tenants. Many of Stag Industrial’s clients need their warehouses to stay in business and service customers in the most efficient way. It’s an expense very few of Stag Industrial’s clients will give up, and that results in healthy cash flow and a 95.8% occupancy rate.

Core funds from operations per diluted share increased by 8.3% year-over-year. The company continues to generate profits while offering a 3.88% yield. Stag Industrial also delivered double-digit year-over-year revenue growth and wrapped up the third quarter with a 23.0% net profit margin.

The stock has outperformed the S&P 500 with a 16% year-to-date gain. The REIT doesn’t always outperform the S&P 500, based on its 29% return over the past five years. However, Stag Industrial is more stable than most stocks, and it pays out a monthly dividend. 

EPR Properties (EPR)

EPR Properties (NYSE:EPR) owns entertainment properties, such as amusement parks, movie theaters, and ski resorts. It can be a good play as Gen Z shifts more to experiences after enduring the pandemic and living in a digital world for most of their lives. Shares are up by 16% year-to-date and have rallied by 58% over the past five years. EPR stock even offers a 6.92% yield, with rising revenue and profits.

EPR Properties only delivered 1% revenue growth in the third quarter, but net income jumped by 49.1%. Higher profit margins can support the stock’s high yield. The REIT owns 330 locations that are spread across 43 states and Canada. 

EPR Properties touts itself as a company that builds the social infrastructure of societies. The focus on experiences has paid off so far, and a vast real estate portfolio makes it easier for the company to scale. It’s expensive to get into this type of real estate on your own, but ERP stock gives you a front-row seat.