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EPR Properties has a massive addressable market and is stepping on the gas with its growth plans.
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Prologis has major cost advantages and is quietly building its data center portfolio.
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The interest rate environment could give both stocks an additional tailwind.
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10 stocks we like better than EPR Properties ›
Over the past decade, high-dividend stocks as a group have generally underperformed their non-dividend counterparts over the past decade, and it’s easy to see why. Not only has the market’s performance been driven by mega-cap tech stocks (most of which pay little or no dividends), but the past two decades have also seen two prolonged rate-rising environments, with a global pandemic in between.
The latter conditions have been particularly tough on real estate investment trusts, or REITs. Real estate is one of the most rate-sensitive sectors for a number of reasons, plus the pandemic has been largely devastating to the industry.
However, the Next the decade might be a different story. With interest rates on the decline and expected to gradually decline further over the next few years, it might be a good time to take a closer look at some REITs for long-term investing. Here are two in particular that are at the top of my to-buy list right now.
EPR properties (NYSE: EPR) it’s not exactly a household name, but it could be one of the best REITs to buy and own in the next 10 years. If you’re not familiar, EPR invests in experiential properties, including theaters, water parks, ski resorts, and food and play properties, among others, where tenants sell experiences, not physical products.
EPR has underperformed due to uncertainty in the cinema industry, but recent box office results suggest these fears may be overblown. Additionally, after five years of intentionally slow growth due to the pandemic and high interest rates, EPR is finally ready to step on the gas when it comes to growth. Management estimates an addressable market opportunity of $100 billion, so it will be interesting to watch the portfolio grow.
At the time of writing, EPR has a dividend yield of 6.4%, which is paid in monthly installments. And over the long term, the combination of dividends plus growth potential from its investment strategy could result in market-beating total returns.
Prologue (NYSE: PLD) is not only the largest industrial real estate investment trust (REIT), but is one of the largest REITs of any kind in the market. The company mainly owns logistics properties such as large-scale distribution centers, and as of the latest information it owns 1.3 billion square meters of leased space in 20 countries around the world. Each year, $3.2 trillion in goods moves through Prologis distribution centers.