If you're looking for the best dividend stocks to buy today, we have two real estate--related investments you won't want to miss.
Yields on debt securities are dropping, and there has been a trend in the market toward greater risk and higher yield through stocks.
But many are also seeking less-risky alternatives to stocks in this volatile economy. These investors should be looking at strong dividend payers.
Some of the best dividend stocks are real estate investment trusts, or REITs. These are attractive choices for investors looking for growth plus guaranteed income.
Our proprietary Money Morning VQScoreâ„¢ system has uncovered two high-ranking REITs. One of these has a dividend yield over 12%.
Here are the top two dividend stocks to buy now...
One of our top REITs and dividend stocks to buy now is Sunstone Hotel Investors Inc. (NYSE: SHO).
This is a trust based in California, focused on lodging. It has interests in 22 hotel properties with major names such as Hyatt, Marriott, and Hilton. Those properties represent over 10,700 rooms in the hospitality sector.
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Some of the company's most profitable markets for lodging are in San Diego; Boston; Hawaii; Washington, D.C.; and Florida.
Green Street Advisors ranks SHO the sixth highest in corporate governance out of the more than 80 REITs it covers.
Analysts anticipate the company's revenue for 2018 will be $1.5 billion and that this will drop to $1.3 billion in 2019. It's also noteworthy that nearly all company employees are shareholders and that 40% of senior management compensation is tied to shareholder returns.
These lower sales figures are one of the reasons that shares of SHO are about 5% lower than their November 2018 levels.
But the company continues to beat earnings estimates consistently, and it pays a 5% dividend yield. This is about double what you could get with a 10-year Treasury.
In the current market environment, this makes for a winning dividend stock.
But we have one that could be even better...
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New Residential Investment Corp. (NYSE: NRZ) is our top pick if you're looking for a dividend stock to buy now.
Even though the U.S. Federal Reserve has reduced its balance sheet, there continues to be a perception that interest rates will rise in the bond market.
The rationale is that fewer willing buyers are going to prompt offers of higher rates from borrowers. This is basic supply and demand, but the market realities are more complicated.
Since quantitative easing took hold, we haven't seen the central bank playing a role in the credit markets. Interest rates plunged at the same time.
Less buying activity has caused others in the market to look to the U.S. debt market for a safe alternative.
This is where New Residential Investment Corp. comes in. This REIT is a leading manager and investor of mortgage-related assets.
When prices jumped and yields fell in 2018, those assets suddenly became much more valuable.
But the market values shares of NRZ by assuming that the overall market is going to tumble or that rates will continue to rise. Both or neither could happen, but this fear has created immense opportunity.
In New Residential's case, today's investor would receive close to 12% on their money.
This is a standout return compared to some other debt instruments.
The obvious question is whether this is a sustainable yield, and it probably isn't.
Even so, any loss in the dividend yield with this investment would be offset by gains in share value.
It almost seems like an investor wouldn't be able to lose if they chose New Residential today. So far, they haven't.
There was a sell-off in the last quarter of 2018, and the share price barely moved.
While the market has become more volatile lately, investors can look at a stock like NRZ as a low-risk way to build wealth.
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