Those following Money Morning this year know I've been banging the table for REITs throughout 2019.
In the current market environment, I truly can't believe how attractive these investments have become.
Are you kidding me? Many of these REITs pay dividends three times (or more) what you'll get from Treasury securities.
And it's not an optical illusion.
Right now, REITs represent the single greatest source of value in the market.
Interest rates are collapsing across the globe. The United States is clearly not immune to what is becoming a deflationary spiral.
Some call it a bond bubble, ready to collapse in a return to normalization for rates. Is there an economic explosion on the horizon? How does that work at the end of a decade-long economic expansion?
The business cycle doesn't work that way. Of course, there must be a "pause and refresh" or even a recession at some point, but a full-blown explosion is highly unlikely.
Bond market participants understand this, hence the buying of bonds even as interest rates fall to historic lows. The Federal Reserve is not helping matters with unclear communication, either.
That's why we keep seeing an inverted yield curve. Welcome to the new norm.
While that yield curve inversion may not last long, changing the underlying dynamics is like steering the Titanic.
Low interest rates are here to stay...
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What is an income investor to do? Pinpoint the best REITs in the market, of course.
But not just any REIT will do; you have to own the right REIT, the top REIT as rated by the Money Morning Stock VQScore™ system.
It's the strong fundamentals combined with massive yields that make this REIT so unbelievable.
And this top REIT just earned the highest VQScore available...
This Is the Top REIT to Buy in September 2019
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Self-storage REIT Jernigan Capital Inc. (NYSE: JCAP) has our highest VQScore of 4.9, and it should be bought heavily in the current market conditions.
Since peaking earlier in the year, the stock has sold off hard.
But this should be viewed as a buying opportunity. You see, the self-storage market is in the early stages of a huge boom.
Low interest rates are huge for the housing market, a market that is already in tight supply.
Tight supply translates to more renting. More renting translates to more use of self-storage units.
Consumers need to store their belongings somewhere. There is simply no space in a multifamily unit.
So as shares of Jernigan have stumbled, the yield has increased to an incredible 7.27%.
One would think a REIT with that sort of yield would be pricey to attain.
That would be the wrong assumption.
Shares of Jernigan trade for a mere 16 times current-year expected earnings.
That's a steal in my book, especially when the VQScore sits at 4.9.
With a market multiple above that level, it makes me wonder what sort of stocks are being purchased today.
Would you rather own a stock losing money and trading for a nosebleed valuation or a company with a long operating history of profits and positive cash flow that can pay a 7% dividend?
It really is a no-brainer.
With interest rates falling to zero or beyond, where else can you find such value and high income? There is no other place.
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