September will close the book on the third quarter and take us into the final stretch of 2020.
This has been a strange year, to say the least, and most people will be glad to see 2020 in the rear-view mirror. There is a lot of hope that 2021 is the year we see a safe, effective, and widely available vaccine for the coronavirus and a fully reopened economy.
After months of stress due to the coronavirus, people are ready for a break.
Until then, we're focused on strategies to help you make money now. With volatility rising into the fall and uncertainty in the economy sticking around, REITs offer a way for investors to add some stability - and cash income - to their portfolios.
That's not the only reason to buy REITs right now either. By buying now, you can lock in next quarter's dividend payment.
September is also the end of the reporting period for most companies and real estate investment trusts. Many REITs will go ex-dividend late in the month and make payments in mid-October. If you plan to buy REITs, you want to buy them before the ex-dividend date to ensure that you collect four dividends over the next year and not just three payouts.
Here are some of the top names to consider.
This REIT Could Help with a Vaccine
Alexandria Real Estate Equities Inc. (NYSE: ARE) is one of the fastest-growing REITs in the United States. Over the past five years, it has grown earnings by more than 25% a year, and in the most recent quarter, earnings were up a whopping 166% year over year.
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Alexandria Real Estate Equities owns life science, technology, and agtech campuses in what it calls AAA innovation cluster locations. Alexandria pioneered life sciences REITs and has a significant presence in critical life science and research markets like Boston, San Francisco, New York City, San Diego, Seattle, Maryland, and Research Triangle in North Carolina.
The REIT uses what it calls a cluster model and develops its properties close to academic institutions, leading scientific and managerial talent, and sophisticated investment capital.
Many of the world's leading biotech and research firms are tenants of Alexandria Properties. It is not going to be a big surprise if the COVID-19 vaccine is developed in a lab owned by this REIT as 80 of its life sciences tenants are working on coronavirus-related projects.
Alexandria Life Sciences just announced it is increasing the quarterly dividend by 6% to $1.06 per common share. The stock will go ex-dividend on Sept. 28, so you want to own your shares before then to guarantee that you receive the payout.
The cash will hit your account on Oct. 15.
The Best E-Commerce REIT to Buy
First Industrial Realty Trust Inc. (NYSE: FR) is also going ex-dividend later this month. First Industrial owns regional distribution centers, light industrial, and other industrial facility types. Industrial real estate is about e-commerce and supply chain logistics. COVID-19 and other economic concerns have not impacted the First Industrial portfolio much at all. Its properties are 97% occupied, and it collected 98% of the rent due last month.
We all know by now about how the meteoric rise in e-commerce has been accelerated by the pandemic. We have seen e-commerce adoption and use rise to levels no one expected to see for a decade. Even the last die-hard holdouts have been forced online, and no one will ever go 100% back to the way it used to be.
The other part of the story is the remaking of the supply chain. The pandemic taught us that we could not run the world with just in time inventory during a crisis. We are going to see greater demand for warehouse space. When the coronavirus first began to spread in the United States, we ran out of almost everything. Supermarkets looked like a scene from a zombie movie in some parts of the country.
Supply chain philosophies are changing as a result of what we have experienced in 2020 and will create significant demand for warehouse space.
That's fantastic news for the owners of industrial real estate.
First Industrial has declared a dividend of $0.25 per share fit the third quarter. The stock will go ex-dividend on Sept. 29, so be sure and buy your shares before then.
The cash will hit your account on Oct. 19.
But that's not all we have for you today.
Our best REIT to buy now trades for under $10 a share and pays a nearly 5% dividend yield.
This is a great REIT to add to your portfolio before the next dividend payment in October...
The Best REIT to Buy Under $10
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.