Real Estate Investment Trusts (REITs) are a popular choice for investors looking to gain exposure to real estate without the need to directly manage properties. REITs own and often operate real estate properties and distribute the majority of their income as dividends to shareholders. This structure makes them a favored option for income-seeking investors. The stock market lists various types of REITs. This includes those focusing on residential, commercial, healthcare, and industrial properties, offering a diverse range of investment opportunities.
One of the key advantages of investing in REIT stocks is the potential for high dividend yields. Which are often higher than those of other equities. REITs are legally required to distribute at least 90% of their taxable income to shareholders annually in the form of dividends. This makes them highly attractive for dividend income. They also offer the liquidity of stocks, allowing investors to buy and sell shares easily on major exchanges.
However, REITs come with certain disadvantages. They are highly sensitive to interest rate changes; rising rates can reduce the value of REIT stocks as they compete with safer bonds that yield more in such environments. Additionally, because they are tied to the real estate market, they can be heavily affected by economic downturns that decrease property values and rental income. Taking this into consideration, here are two REIT stocks to watch in the stock market today.
REIT Stocks To Buy [Or Avoid] Now
SL Green Realty Corp. (SLG Stock)
To initiate, SL Green Realty Corp. (SLG) is a real estate investment trust (REIT) that mainly focuses on acquiring, managing, and maximizing the value of Manhattan commercial properties. As New York City’s largest office landlord, SL Green owns, manages, or has investments in a variety of commercial spaces, including high-profile office buildings and retail properties.
Back in April, SL Green Realty announced its financial results for the first quarter of 2024. The company reported a net income of $0.20 per share. Additionally, Funds from Operations (FFO) were $3.07 per share, boosted by gains from discounted debt extinguishments. SL Green also raised its FFO guidance for 2024 to between $7.35 and $7.65 per share. Additionally, they signed 60 office leases in Manhattan, covering 633,660 square feet.
In 2024, shares of SLG stock have moved higher by 23.65% YTD. While, during Friday’s premarket trading session, SL Green Realty stock looks set to open at around $55.91 a share.
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Boston Properties (BXP Stock)
Second, Boston Properties Inc. (BXP) is a REIT specializing in office spaces in the United States. The company owns, manages, and develops a significant portfolio of Class A office space, with properties primarily in Boston, Los Angeles, New York, San Francisco, and Washington, D.C.
This week, Boston Properties announced that its Board of Directors declared a regular quarterly cash dividend of $0.98 per share of common stock. This dividend covers the period from April 1, 2024, to June 30, 2024, and is payable on July 31, 2024, to shareholders of record as of June 28, 2024. This results in an annual dividend yield for investors of 6.39%.
Year-to-date, shares of BXP stock have dropped by 14.98% so far. Meanwhile, during Friday’s premarket trading session, Boston Properties stock looks set to open at around $61.30 a share.
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