The Top REIT to Own in November Pays 8%

Real estate is an exceptional asset for savvy investors.

While everyone else is chasing bond prices higher (and thus getting lower yields), smart investors are turning to the top-performing asset class of the last 20 years.

Real estate - despite economic headwinds - continues to generate incredible cash flows and appreciation upside for anyone seeking an "alternative" investment.

Of course, ordinary investors might not have hundreds of thousands if not millions sitting around to buy property or tap into hedge funds and other strategies that require the designation of an "accredited investor."

But there is one unique way to invest in real estate, and the upside for these investments is immense.

That's through real estate investment trusts (REITs).

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These publicly traded vehicles provide steady dividends by generating income from working real estate assets.

Even better - as the Fed prepares to cut rates, REITs historically outperform in periods of low-interest rates.

To find the best REIT to buy now, I use something called the Money Morning Stock VQScore™.

This proprietary system tracks the most profitable REITs on the market and assigns each a score from 0 to 4.9.

That rating tells you whether shares are a "Buy," "Hold," or a "Sell." The higher the score, the better.

It also tells you which REITs could soon break out, with earnings per share (EPS) rising and demand for shares picking up.

Let's unpack the top REIT (which pays an 8% dividend) to buy for November.

Buy This "Community REIT" Now

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The VQScore system assigns every stock and REIT with a score from 0 to 4.9. Anything above 4 signals the investment is a "Strong Buy."

This week, our system flashed a "Buy" on Whitestone REIT (NYSE: WSR). With a score of 4.6, Whitestone looks ready to lift off in the months ahead.

The Houston-based real estate firm has a compelling story. With an 8% dividend and plenty of cash flow, this will be a highly attractive REIT in the months ahead.

First, the dividend is as ideal and reliable as they come when we talk about falling interest rates.

The Federal Reserve has just cut interest rates for the third time in 2019. Lower rates have driven institutional investors to pour into higher-risk entities like junk bonds and high-yield stocks that carry much more risk due to economic uncertainty.

But REITs like Whitestone provide a reliable and steady flow of cash to investors. The reason: the nature of their industry.

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This element brings us to the company itself. I define Whitestone as a "community REIT" that is largely "Internet proof."

What I mean is, the firm focuses on real estate assets in "go-to" centers where consumers must visit to buy goods and services.

Think supermarkets, dry cleaners, medical centers, banking centers, restaurants, yoga studios. These destinations don't rely on the Internet for commerce. These tight-knit community commerce centers are locations where people gather.

The "e-commerce resistant" strategy layers on top of another vital element that makes Whitestone such a brilliant firm.

Not only is it expanding into the leasing and development of properties around these brick-and-mortar locations, but it's doing so in high-growth markets.

The company only focuses on the fastest-growing population centers in the country that have highly educated workforces and high levels of disposable income.

This ensures that the properties are generating the cash flow that can boost the stock price and afford a hefty dividend. These locations are also based in business-friendly states that face no threat of additional regulations.

Diversification and Growth

The firm's top properties are based in Phoenix, Austin, Dallas-Fort Worth, Houston, and San Antonio.

Whitestone has 57 properties with 1,345 tenants and a strong occupancy rate of 89.4%. The firm has never missed a dividend payment since its IPO - which means it's met its obligation to investors for 107 consecutive months.

Right now, Whitestone REIT trades at $14.30 per share.

But I foresee a real situation where the combination of yield-hunting, improving fundamentals, and acquisition growth press this REIT to $20 per share by the end of 2020.

Combine a potential upside of 40% with an 8% dividend, and you're looking at a return that could easily double the expected S&P 500 gains in 2020.

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About the Author

Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.

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