In this article, we will discuss some of the best REIT dividend stocks to invest in.
In the United States, real estate investment trusts (REITs) play a significant role in the real estate sector and the overall financial system. Equity REITs pool funds from numerous investors to purchase and manage income-generating properties, such as residential, commercial, and industrial real estate. These REITs are publicly traded on major stock exchanges, allowing investors to earn steady income—primarily from rental revenues—without the need to personally manage or fund the properties. However, REIT share prices can fluctuate and are highly responsive to shifts in interest rates.
The introduction of the REIT structure transformed real estate investing. Over time, REIT indices have adapted to reflect the sector’s evolution. With the growth and increasing significance of new segments, the broader REIT landscape has changed considerably, yet it continues to provide attractive income opportunities. The real estate market has become more diverse, with different segments offering distinct risk and return dynamics.
Also read: 11 Best REIT Stocks To Buy Under $10
It is frequently seen that many investors remain cautious about real estate and REITs, partly due to challenges faced by the retail and office subsectors. Additionally, the sector’s reliance on significant leverage makes it vulnerable to rising interest rates. However, recent performance trends have caught investors’ attention. Over the past three months ending November 2024, investors in the US have allocated around $4.5 billion to REIT and real estate-focused ETFs, surpassing investments in any other sector, according to a report by Bloomberg. This growing interest may be attributed to unique features of the REIT market and broader macroeconomic developments.
According to a report by Nareit, as the third quarter of 2024 begins, it signals nearly two years of disparity between REIT valuations and those of private real estate. Although the gap between the two is gradually narrowing, the prolonged adjustment period still presents a compelling opportunity for institutional investors to incorporate REITs into their real estate investment strategies. The report further highlighted the performance of REITs in recent years. Since 2022, REIT performance has generally moved inversely to changes in the 10-year Treasury yield. In the third quarter of 2024, REITs delivered strong total returns as the 10-year Treasury yield declined, leading to significant reductions in the REIT implied cap rate and narrowing the public-private cap rate spread. However, since the end of the third quarter, a notable rise in the 10-year Treasury yield has caused REIT total returns to decline, likely widening the cap rate spread again.
If this inverse relationship continues, interest rates will remain a key factor in the valuation adjustment process. Narrowing the public-private cap rate gap is crucial for reigniting property transactions and offers real estate investors an opportunity, as it could drive REIT outperformance into 2025. If REITs sustain their momentum and private property investors maintain their gradual increases in appraisal cap rates, the commercial real estate market may finally resolve its valuation disparity between public and private assets.
REITs are an attractive option for income-focused investors. By law, they must distribute at least 90% of their taxable income to shareholders as dividends. Unlike many other companies, REITs typically do not retain earnings, which often results in higher yields compared to other equity investments. According to Tower Financial Group of Wells Fargo Advisors, in 2023, equity REITs offered an average yield of 3.9%, significantly outpacing the 1.4% average yield of stocks in the broader market. In view of this, we will take a look at some of the best dividend stocks in the REIT sector.
Photo by Blake Wheeler on Unsplash
Our Methodology:
For this list, we scanned Insider Monkey’s database of 900 hedge funds as of Q3 2024 and picked REIT companies that pay regular dividends to shareholders. Next, we narrowed down 12 companies that are popular among elite funds at the end of Q4 and ranked them in ascending order of the number of funds that have stakes in them.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
12. Universal Health Realty Income Trust (NYSE:UHT)
Number of Hedge Fund Holders: 12
Universal Health Realty Income Trust (NYSE:UHT) is an American real estate investment trust company that mainly invests in healthcare and human service-related facilities. The company holds investments or commitments across 76 properties spread across 21 states. It reported strong earnings in the third quarter of 2024, with revenues coming in at $24.5 million, up slightly from $24.2 million in the same period last year. The company’s net income for the quarter was nearly $4 million, up from $3.8 million in the prior year period.
Universal Health Realty Income Trust (NYSE:UHT) is down by over 7% since the start of 2024 due to high interest rates. This was also highlighted by Artisan Partners in its Q1 2024 investor letter. Here is what the firm has to say:
“Our bottom contributors were Cable One, Philips and Universal Health Realty Income Trust (NYSE:UHT). Universal Realty Income Trust (UHT) is a health care REIT (real estate investment trust) specializing in health care facilities, including acute care hospitals, behavioral health centers and medical office buildings. Our initial purchase was in June 2023. Like other high income producing stocks, UHT has been out of favor given higher interest rates. Besides the stock selling at low levels relative to its historical valuation and other REITs, we liked UHT’s track record of execution, low leverage, reduced cyclicality and consistent annual dividend growth. It currently yields nearly 8%. Recent results have been strong, with revenue growth up over 5% driven by annual lease price escalators, a better mix of assets, increased occupancy and M&A. However, UHT was down in Q1 along with the broader real estate sector as interest-rate sensitive areas badly lagged the rest of the market.”
Universal Health Realty Income Trust (NYSE:UHT)’s dividend remained unaffected despite reporting negative returns due to macroeconomic conditions. On November 25, the company declared a 0.7% hike in its quarterly dividend to $0.735 per share. This marked the company’s 41st consecutive year of dividend growth, which makes UHT one of the best dividend stocks in the real estate sector. The stock has a dividend yield of 7.21%, as of December 12. In the most recent quarter, the company also returned over $10 million to shareholders through dividends.
At the end of Q3 2024, 12 hedge funds tracked by Insider Monkey reported having stakes in Universal Health Realty Income Trust (NYSE:UHT), the same as in the previous quarter. The collective value of these stakes is nearly $23.6 million. Among these hedge funds, Renaissance Technologies was the company’s leading stakeholder in Q3.
11. Innovative Industrial Properties, Inc. (NYSE:IIPR)
Number of Hedge Fund Holders: 13
Innovative Industrial Properties, Inc. (NYSE:IIPR) is a California-based company that facilitates the expansion of the legal medical cannabis industry by providing investors with a real estate-focused way to gain exposure to the cannabis market. The company acquires regulated cannabis facilities from licensed operators nationwide and then leases them back through long-term triple net lease agreements. Currently, it owns 108 properties across 19 states. The REIT focuses exclusively on the medical cannabis sector, which is more extensively legalized and regulated than the recreational market. Its operational model achieves several objectives. Since the start of 2024, the stock has surged by over 2.4%.
Innovative Industrial Properties, Inc. (NYSE:IIPR) reported mixed earnings in the third quarter of 2024. The company posted revenue of $76.5 million, which fell by 2% from the same period last year. The revenue also beat analysts’ estimates by $877,000. The company reported adjusted funds from operations (AFFO) of $64.3 million and normalized funds from operations (Normalized FFO) of $57.8 million.
Innovative Industrial Properties, Inc. (NYSE:IIPR)’s cash position also remained strong. It ended the quarter with over $147 million available in cash and cash equivalents, up from $140 million in the prior-year period. Its total assets amounted to $2.4 billion. The company currently pays a quarterly dividend of $1.90 per share and has an attractive dividend yield of 7.32%, as of December 12. It is one of the best dividend stocks on our list as the company has been growing its payouts for eight consecutive years.
As of the close of Q3 2024, 13 hedge funds in Insider Monkey’s database held stakes in Innovative Industrial Properties, Inc. (NYSE:IIPR), which remained unchanged from the previous quarter. The total value of these stakes is more than $102 million.
10. Arbor Realty Trust, Inc. (NYSE:ABR)
Number of Hedge Fund Holders: 16
Arbor Realty Trust, Inc. (NYSE:ABR) ranks tenth on our list of the best dividend stocks. The American real estate investment trust company invests in a diversified portfolio of finance assets in the multifamily and commercial real estate markets. In the third quarter of 2024, the company reported revenue of $88.8 million, which was a 17.2% decline compared to the same period last year. Despite this, the revenue exceeded analysts’ expectations by $3.10 million. At the end of the quarter, the company had around $600 million in cash and liquidity. Its cash position remains solid, with trailing twelve-month operating cash flow totaling $492 million.
Arbor Realty Trust, Inc. (NYSE:ABR) is down by nearly 5% YTD. Earlier this year, the company faced difficulties when federal prosecutors and the FBI initiated an investigation into its commercial mortgage REIT. The investigation focused on the company’s lending practices and the accuracy of its statements regarding the performance of its loan portfolio. In response, the company assured that its commitment to cooperating with the regulatory investigation and expressed confidence in its adherence to proper standards.
Arbor Realty Trust, Inc. (NYSE:ABR)’s reassurance helped restore investor confidence. The company is a well-established industry player, operating since 2003. Throughout its history, it has successfully navigated major economic challenges, including the Great Financial Crisis, the 2020 pandemic, and the post-inflation surge along with Federal Reserve rate hikes in 2023. Currently, it offers a quarterly dividend of $0.43 per share and has a dividend yield of 12.04%. The company has been rewarding shareholders with growing dividends for the past 11 years.
The number of hedge funds tracked by Insider Monkey owning stakes in Arbor Realty Trust, Inc. (NYSE:ABR) grew to 16 in Q3 2024, from 12 in the previous quarter. The consolidated value of these stakes is more than $68.2 million. With over 2.4 million shares, Omega Advisors was the company’s leading stakeholder in Q3.
9. National Retail Properties, Inc. (NYSE:NNN)
Number of Hedge Fund Holders: 20
National Retail Properties, Inc. (NYSE:NNN) is an American real estate investment trust company, based in Florida. The company follows a straightforward investment approach that has contributed to its consistent performance. The REIT focuses exclusively on single-tenant net lease retail properties, where tenants are responsible for all operating costs, such as maintenance, property taxes, and insurance. This lease structure allows the company to generate stable rental income that increases annually, either at a fixed rate or in line with inflation. Moreover, it targets properties in strong markets, ensuring they remain attractive to potential replacement tenants if the current tenant does not renew their lease. Additionally, it maintains a diversified portfolio across different regions, industries, and tenants. In the past 12 months, the stock has surged by nearly 5%.
In the third quarter of 2024, National Retail Properties, Inc. (NYSE:NNN) reported revenue of $218.6 million, which showed a 6.55% growth from the same period last year. Its funds from operations (FFO) also jumped to over $154 million, from $147.2 million in the prior year period. As of September 30, 2024, the company achieved a strong occupancy rate of 99.3%, with a weighted average remaining lease term of 10.0 years. It made $113.6 million in property investments, which included acquiring eight properties totaling about 626,000 square feet of gross leasable area, at an initial cash cap rate of 7.6%. The company also sold nine properties for $20.0 million, generating $7.8 million in gains from those sales.
On October 15, National Retail Properties, Inc. (NYSE:NNN) declared a quarterly dividend of $0.58 per share, which was in line with its previous dividend. Overall, the company holds a strong dividend history, having raised its payout for 35 straight years. This milestone has been achieved by only two other REITs. As of December 12, the stock has a dividend yield of 5.47%.
Of the 900 hedge funds tracked by Insider Monkey at the end of Q3 2024, 20 funds held investments in National Retail Properties, Inc. (NYSE:NNN), up from 16 in the previous quarter. The stakes held by these hedge funds have a collective value of more than $230.5 million. Among these funds, Long Pond Capital was the company’s leading stakeholder in Q3.
8. Realty Income Corporation (NYSE:O)
Number of Hedge Fund Holders: 23
An American real estate investment trust company, Realty Income Corporation (NYSE:O) has always been popular among investors because of its monthly dividends. The company distinguishes itself by targeting high-quality commercial tenants, particularly in industries that are less affected by recessions, such as dollar stores and grocery stores. The company boasts an impressive occupancy rate of 98.7%. Its portfolio is spread across the US and Western Europe, with a notable emphasis on the United Kingdom. The stock has surged by nearly 5% in the past six months.
In the third quarter of 2024, Realty Income Corporation (NYSE:O) reported revenue of $1.27 billion, marking a 27% increase compared to the same period last year. The revenue surpassed analysts’ expectations by more than $10 million. The company has updated its 2024 investment volume forecast to approximately $3.5 billion and raised the lower end of its AFFO per share guidance to a range of $4.17 to $4.21, reflecting a 4.8% growth at the midpoint. Looking ahead, the company is exploring various growth opportunities, including capital diversification, to further expand its platform’s reach and scale.
Parnassus Investments highlighted Realty Income Corporation (NYSE:O) in its Q3 2024 investor letter. Here is what the firm has to say:
“Realty Income Corporation (NYSE:O) is poised to benefit from lower interest rates. Because its commercial tenants are mostly on 10-year leases, the stock’s steady dividend stream is attractive in the current environment of slow deceleration in the economy with rates coming down. In this favorable backdrop, the company also continues to execute well.”
On December 10, Realty Income Corporation (NYSE:O) declared a 0.2% hike in its monthly dividend to $0.264 per share. It is one of the best dividend stocks on our list as the company has raised its payouts multiple times since it went public in 1994. The stock’s dividend yield on December 12 came in at 5.75%.
Insider Monkey’s database of Q3 2024 indicated that 23 hedge funds held stakes in Realty Income Corporation (NYSE:O), growing from 19 in the preceding quarter. The consolidated value of these stakes is over $163.5 million. With over 1.7 million shares, AEW Capital Management was the company’s leading stakeholder in Q3.
7. CubeSmart (NYSE:CUBE)
Number of Hedge Fund Holders: 26
CubeSmart (NYSE:CUBE) invests in self-storage facilities across the US. In the third quarter, trends continued as the company navigated a competitive environment for new customer rental rates while existing customers remained resilient. The company is currently under contract to acquire two stores—one in Oregon and one in Pennsylvania—for a total purchase price of around $22.0 million. These acquisitions are expected to close in the fourth quarter of 2024. CUBE has surged by nearly 11% in the past 12 months.
CubeSmart (NYSE:CUBE) generated nearly 271 million in revenues in the third quarter of 2024, which showed a 1.1% growth from the same period last year. The revenue also beat analysts’ estimates by $1.40 million. The company added 24 stores to its third-party management platform, bringing the total number of third-party managed stores to 893. It also has agreements with developers for the construction of self-storage properties in locations with high barriers to entry. As of September 30, 2024, the company had two joint venture development properties under construction. The total investment for these projects is expected to be $36.9 million, with $9.1 million already invested by that date. Both properties are located in New York and are expected to open in the third quarter of 2025.
CubeSmart (NYSE:CUBE) currently offers a quarterly dividend of $0.51 per share. The company maintains a 15-year track record of consistent dividend growth, which makes it one of the best REIT dividend stocks. The stock has a dividend yield of 4.39%, as recorded on December 12.
According to Insider Monkey’s database of Q3 2024, 26 hedge funds held stakes in CubeSmart (NYSE:CUBE), up from 23 in the previous quarter. The total value of these stakes is more than $217.6 million. Diamond Hill Capital owned the largest stake in the company, worth over $131.3 million.
6. Agree Realty Corporation (NYSE:ADC)
Number of Hedge Fund Holders: 26
Agree Realty Corporation (NYSE:ADC) is an American real estate investment trust company that specializes in the development and acquisition of properties net leased to retailers in the US. Net lease properties are typically single-tenant buildings where the tenant covers most property-related expenses. While each individual property carries higher risk due to having only one tenant, the risk is significantly reduced when managing a large portfolio. Agree Realty owns approximately 2,250 properties, making its portfolio quite substantial. Since the start of 2024, the stock has surged by nearly 16%.
Agree Realty Corporation (NYSE:ADC) generated $154.3 million in revenues in the third quarter of 2024, which saw a 13% growth from the same period last year. The company invested about $237 million in 93 retail net lease properties. Net income per share attributable to common stockholders rose by 2.6%, reaching $0.42. The balance sheet is in a strong position, with a proforma net debt to recurring EBITDA ratio of 3.6 times, or 4.9 times excluding unsettled forward equity.
Agree Realty Corporation (NYSE:ADC) has a strong balance sheet as the company ended the quarter with over $13.2 million available in cash and cash equivalents, growing from $11 million nine months ago. The company has paid regular dividends to shareholders over the years, starting its dividend policy with quarterly payouts in 1995 and shifting to monthly dividends in 2021. It currently pays a monthly dividend of $0.253 per share, having raised it by 1.2% in October this year. This marked the company’s eighth consecutive year of dividend growth, which makes ADC one of the best dividend stocks on our list. The stock supports a dividend yield of 4.12%, as of December 12.
Agree Realty Corporation (NYSE:ADC) was a part of 26 hedge fund portfolios at the end of Q3 2024, up from 23 in the previous quarter, as per Insider Monkey’s database. The stakes held by these funds have a collective value of $565 million. With more than 3 million shares, Long Pond Capital was the company’s largest stakeholder in Q3.
5. Crown Castle Inc. (NYSE:CCI)
Number of Hedge Fund Holders: 34
Crown Castle Inc. (NYSE:CCI) is a real estate investment trust company that focuses on providing infrastructure for wireless communication. The company owns, operates, and leases a vast network of cell towers, small cell networks, and fiber-optic cables across the US. It has refocused its efforts on higher-return capital projects, leading it to reduce its growth spending plans. The company has also initiated a strategic review of its fiber business. These changes are expected to enhance its cash flow and returns, improving its ability to self-finance organic growth opportunities.
Crown Castle Inc. (NYSE:CCI) reported revenue of $1.65 billion in the third quarter of 2024, which fell slightly by 0.9% from the same period last year. However, the revenue beat analysts’ estimates by $17 million. Net income for the quarter was $303 million, up from $265 million in the same period of 2023. This included $48 million in charges related to the restructuring plan announced in June 2024. The company’s performance was also highlighted by Columbia Threadneedle Investments in its Q3 2024 investor letter. Here is what the firm has to say:
“The fund held two out-of-benchmark positions in Real Estate Investment Trust (REIT) companies American Tower Corporation and Crown Castle Inc. (NYSE:CCI). REITs have historically performed well during periods of declining interest rates due to lower borrowing costs. The two companies performed very well during the third quarter after the Federal Reserve cut interest rates 50 basis points in September, with the expectation for additional cuts soon.”
On November 6, Crown Castle Inc. (NYSE:CCI) declared a quarterly dividend of $1.565 per share, which was in line with its previous dividend. The company remained committed to its shareholder obligation, returning $681 million to investors through dividends in the most recent quarter. The stock has a dividend yield of 6.34%, as recorded on December 12.
As of the end of Q3 2024, 34 hedge funds tracked by Insider Monkey held stakes in Crown Castle Inc. (NYSE:CCI), compared with 38 in the previous quarter. The overall value of these stakes is more than $1.24 billion. Ken Fisher’s Fisher Asset Management was the company’s leading stakeholder in Q3.
4. VICI Properties Inc. (NYSE:VICI)
Number of Hedge Fund Holders: 35
VICI Properties Inc. (NYSE:VICI) ranks fourth on our list of the best dividend stocks in the REIT sector. The company owns casinos and entertainment properties across the US and Canada. While the company’s heavy reliance on the gaming sector might appear risky, casinos are typically resilient during recessions. The company secures its tenants with long-term contracts, and the strict regulations in the gaming industry create a protective barrier, making it difficult for tenants to move their operations. As a result, Vici has maintained a 100% occupancy rate since its IPO in 2018, even during the disruptions caused by the COVID-19 pandemic in the travel, hospitality, and casino sectors. Most of the company’s long-term leases are tied to the consumer price index (CPI), allowing it to regularly increase rents in line with inflation.
VICI Properties Inc. (NYSE:VICI) has a strong balance sheet. The company concluded Q3 2024 with $355.7 million available in cash and cash equivalents. This strong cash position allowed the company to grow its dividend payouts for seven consecutive years. The dividends grew at a CAGR of 7% since its IPO. In the most recent quarter, it paid approximately $453 million in dividends. The company’s quarterly dividend comes in at $0.4325 per share and has a dividend yield of 5.56%, as of December 12.
In the third quarter of 2024, VICI Properties Inc. (NYSE:VICI) reported revenue of $964.6 million, up 6.7% on a YoY basis. Net income attributable to common stockholders rose by 31.7% year-over-year, reaching $732.9 million. On a per-share basis, it increased by 27.4% to $0.70. AFFO attributable to common stockholders grew by 8.4% year-over-year to $593.9 million, with a per-share increase of 4.9% to $0.57.
With a collective stake value of more than $787.6 million, 35 hedge funds held positions in VICI Properties Inc. (NYSE:VICI) in the third quarter of 2024, as per Insider Monkey’s database. In the previous quarter, 33 funds held investments in the company.
3. Federal Realty Investment Trust (NYSE:FRT)
Number of Hedge Fund Holders: 36
Federal Realty Investment Trust (NYSE:FRT) mainly invests in shopping centers and entertainment properties. The company, while operating as a typical REIT, stands out due to its focus on quality over quantity. By September 2024, the company owned only 102 properties, all located in prime areas. Federal Realty strategically targets properties in major metropolitan regions with high population densities and affluent demographics. This approach has proven beneficial, especially during the pandemic, when tenants seeking better locations moved into its premium properties, allowing Federal Realty to avoid the occupancy challenges faced by many other companies. The stock has delivered a nearly 9% return to shareholders since the start of 2024.
Federal Realty Investment Trust (NYSE:FRT) reported third-quarter 2024 revenue of $303.3 million, marking a 6% year-over-year increase and surpassing analysts’ estimates by $1.85 million. The company completed 126 leases covering 580,977 square feet of comparable retail space, achieving a 14% boost in cash-based rents and a 26% increase on a straight-line basis. Net income attributable to common shareholders rose to $58.9 million, up from $55 million in the same quarter last year.
Currently, Federal Realty Investment Trust (NYSE:FRT) offers a quarterly dividend of $1.10 per share, with a dividend yield of 3.88%, as of December 12. Boasting a dividend growth streak of over 56 years, FRT stands out as one of the best dividend stocks. Its long history of consistent dividend increases and appealing yield make it a favored choice among investors.
As per Insider Monkey’s database of Q3 2024, 36 hedge funds held stakes in Federal Realty Investment Trust (NYSE:FRT), showing an increase from 24 in the previous quarter. These stakes are worth nearly $302 million in total.
2. Prologis, Inc. (NYSE:PLD)
Number of Hedge Fund Holders: 49
Prologis, Inc. (NYSE:PLD) is a California-based real estate investment trust company that invests in logistics facilities. The stock is down by over 17% since the start of 2024. Although the company faced some demand challenges in recent quarters, it is set to achieve solid growth this year, driven by the sustained strength of the industrial real estate market in recent years. As these challenges diminish and demand stays strong, the company’s growth is starting to gain momentum again. This could be seen in its recent quarterly earnings.
Prologis, Inc. (NYSE:PLD) reported revenue of $2.03 billion in the third quarter of 2024, which saw a 6.3% growth on a YoY basis. The revenue also exceeded analysts’ estimates by $130 million. At the end of the quarter, the company reported approximately $6.6 billion in available liquidity. Its debt-to-EBITDA ratio was 5.1x, with debt accounting for 23.1% of its total market capitalization. Projected earnings for 2024, 2025, and 2026 are largely safeguarded, with 99%, 99%, and 98%, respectively, expected in USD or secured through hedging via derivative contracts. Additionally, 96.2% of the company’s equity is denominated in USD.
Prologis, Inc. (NYSE:PLD), one of the best dividend stocks, currently offers a quarterly dividend of $0.96 per share, having raised it by 10.3% earlier this year. The company’s dividend growth streak spans over 11 years, which makes it one of the best dividend stocks on our list. The stock’s dividend yield on December 12 came in at 3.44%, as of December 12.
Prologis, Inc. (NYSE:PLD) was included in 49 hedge fund portfolios at the end of Q3 2024, compared with 56 in the previous quarter, according to Insider Monkey’s database. The stakes held by these hedge funds have a collective value of over $780.7 million. Among these hedge funds, AEW Capital Management was the company’s leading stakeholder in Q3.
1. American Tower Corporation (NYSE:AMT)
Number of Hedge Fund Holders: 73
American Tower Corporation (NYSE:AMT) specializes in wireless and broadcast communications infrastructure in several countries. The challenges faced by the company are overshadowing the strong and consistent demand for communications and data infrastructure. As these challenges are anticipated to subside, the REIT has the potential to achieve significant growth starting in 2025 and beyond. The stock is down by nearly 10% since the start of 2024.
During the third quarter, a key development for American Tower Corporation (NYSE:AMT) was the sale of its underperforming Indian tower operations to Brookfield Infrastructure. This transaction allowed Brookfield to expand its presence in the Indian market, increasing its tower portfolio from 175,000 to 253,000 towers while broadening its customer base. Brookfield acquired the assets at a favorable price, as American Tower faced profitability challenges with the portfolio due to tenant-related issues. The company reported revenue of $2.52 billion in Q3 2024, which fell by 10.5% from the same period last year.
That said, Mar Vista Investment Partners, LLC highlighted the strengths of American Tower Corporation (NYSE:AMT)’s business in its Q3 2024 investor letter:
“American Tower Corporation’s (NYSE:AMT) stock rebounded nearly 20% during the third quarter, helped by the tailwind of lower interest rates. The stock has now appreciated more than one-third since U.S. 10-Yr Treasury interest rates peaked in late April 2024. As a levered REIT, lower rates benefit AMT’s equity value through a lower cost of debt and a higher value for its long-duration cash flows. Fundamental expectations did not change materially during the quarter as the company modestly increased their growth expectations for the year. The long-term global opportunities for 5G deployment, edge-of-network computing, and datacenters, remain attractive and are not fully reflected in the current stock price, in our opinion.”
American Tower Corporation (NYSE:AMT) currently pays a quarterly dividend of $1.62 per share. Though the company has not raised its dividend this year, it has increased its payouts at an annual average rate of 20% since 2013. The company experienced significant growth over the years by expanding its data infrastructure portfolio to meet rising data demand. Although it encountered challenges in 2024, the company anticipates a rebound starting in 2025, positioning itself to resume dividend increases. This outlook makes it an appealing choice for investors seeking both income and substantial growth potential. The stock supports a dividend yield of 3.28%, as of December 12.
American Tower Corporation (NYSE:AMT) was a popular stock among elite funds at the end of Q3 2024, with hedge fund positions growing to 73, from 63 in the previous quarter, according to Insider Monkey’s database. The overall value of these stakes is more than $3.7 billion.
Overall, American Tower Corporation (NYSE:AMT) ranks first on our list of the best REIT dividend stocks. While we acknowledge the potential for AMT to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AMT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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