10 Dividend Trap Stocks to Avoid in 2025

7. Alexandria Real Estate Equities, Inc. (NYSE:ARE)

Performance: -37.92%

Dividend Yield: 6.50%

Payout Ratio: 288.33%

Headquartered in California, Alexandria Real Estate Equities, Inc. (NYSE:ARE) carries on the business of a real estate investment trust (REIT). The company’s focus is on owning, operating, and developing life science and technology campuses. Their clients include biotech, pharmaceutical, and academic research institutions. The company concentrates on high-demand innovation clusters like Cambridge and San Diego to gain a competitive advantage. With strategic partnerships and long-term leases, the company has a strong foothold in mission-critical laboratories and research infrastructure.

Alexandria Real Estate Equities, Inc. (NYSE:ARE)’s performance during the past 1 year has declined by 37.92%. It suggests challenges in creating shareholder value. Primarily, the California wildfire has made a strong impact on the company’s teams and operations. Additionally, the macroeconomic conditions and high interest rates are causing the leasing activity in the biotech sector to slow down considerably. Alexandria Real Estate Equities, Inc. (NYSE:ARE) also anticipates flat growth for its same property NOI in 2025 because of upcoming leasing expiration and vacancies, while the non-revenue enhancing expenditures are expected to grow further due to repositioning activities.

The dividend yield of the company stands at 6.50%, which is enough to attract investors. However, Alexandria Real Estate Equities, Inc. (NYSE:ARE) backs this yield with a payout ratio of 288.33%, suggesting the involvement of high debt risk, thereby earning its place among the worst dividend stocks.