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Income investors often look to the bond market for consistent returns. Yet, the 10-year Treasury yield has sunk down to 2.05%. That's 1.17% lower than 2018's 3.22%. And with this sinking yield, income investors are focusing on the stock market.
That's why Money Morning is bringing you one of the best REITs to buy now.
REITs, or real estate investment trusts, are great for a few reasons. They provide a stable flow of cash, but they also offer solid upsides and tax benefits to income investors.
REITs give you both the income and growth you can't get investing in bonds. So, it's not surprising 80 million U.S. citizens are already invested in REITs.
While they are great, finding the best REITs to buy can be challenging. That's because there are over 1,100 registered REITs in the United States alone. Within these 1,100 REITs, there are over 511,000 properties. That's a lot to sift through.
That's where our Money Morning Stock VQScore™ comes in. This software uses an algorithm to detect stocks with the biggest potential upside. And it helped us find one of the best REITs to buy now.
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In fact, it just uncovered one REIT offering a great 4.28% dividend yield.
It even has a solid 36% upside...
One of the Best REITs to Buy Now
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Right now, Lexington Realty Trust (NYSE: LXP) is one of the best REITs to buy.
This New York-based REIT has been around since 1973, and it has a diverse portfolio of 138 properties across 34 U.S. states.
Lexington focuses on long-term institutional and industrial leases. These types of leases are for single-occupancy properties with an average lease term of roughly nine years. This, combined with its 94.94% occupancy rate, makes Lexington a great long-term buy. It's an asset that has the ability to produce impressive cash flows.
That's because Lexington doesn't lease to just anyone. Lexington's portfolio contains "blue-chip" firms with global operations and strong financials.
Some companies include FedEx Corp. (NYSE: FDX), Cummins Inc. (NYSE: CMI), Charles Schwab Corp. (NYSE: SCHW), Caterpillar Inc. (NYSE: CAT), Wells Fargo & Co. (NYSE: WFC), Amazon.com Inc. (NASDAQ: AMZN), Walgreens Boots Alliance Inc. (NYSE: WBA), and Philip Morris International Inc. (NYSE: PM).
These are not only big companies, but they're also diverse enough to mitigate risk as well. This ensures that Lexington isn't reliant on just one company or sector for its returns.
But, one thing to note with Lexington is that it saw lackluster performance in 2017 and 2018. Over a two-year period, the firm's annual revenue dipped. This spurred the company to focus more on industrial properties.
Now, Lexington's industrial exposure is 71% of its gross book value. That's 22% higher than 2017's year-end 49%.
As a result, Lexington also improved its share buyback program and its cash position. In the first half of 2019, it saw an impressive return of 17.5%.
Plus, with a 3.75 VQScore, the stock's considered a good buy. If it reaches a score of 4, it could break out even higher. That's because our algorithm signals that stocks with a VQScore of 4 or higher are about to surge.
Lexington is a great alternative to bonds and stocks for income investors. Its income-producing assets like industrial properties and housing make this one of the best REITs to buy right now. Plus, it has a 4.28% dividend yield. This means it has a great dividend balance and asset appreciation ahead of it.
Lexington Realty shares currently trade for $9.58 per share. But this REIT could see a solid 36% upside in the next 12 months, according to Wall Street analysts.
Robert Herjavec: Indisputable Proof That Anybody Can Get Rich Through Angel Investing
When Neil Patel launched the Angels & Entrepreneurs Summit, he had only planned to invite a small group of guests to join him and guest "Shark" Robert Herjavec... but then Neil revealed something truly shocking.
During this clip (about halfway through the event), he reveals indisputable proof that anybody can transform their life through angel investing.
We knew we had to show this event to everyone - the information is just too valuable to keep under wraps.