Four Real Estate Investment Trusts to Buy Amid Falling Rates 10/15/2024 | | | The rapid advancement of artificial intelligence and automation is reshaping industries and posing threats to jobs, pushing America's financial system to its limits.
The recent Longshoremen's Strike is just one example; we've also seen Hollywood actors and voice performers strike over AI-related concerns, reflecting a much larger crisis on the horizon.
Click here to prepare. Click Here... | | | | Four real estate investment trusts to buy amid falling rates offer opportunities to profit as their share prices ascend.
The four real estate investment trusts to buy amid falling rates are positioned to ride a growing wave if the Federal Open Market Committee (FOMC) continues to ease its monetary policy for the next year or more, as forecasters expect. Real estate investment trusts (REITs) tend to perform well when interest rates are cut and that is the current outlook with the FOMC's Sept. 18 trimming of the federal funds rate by 0.50%, equaling 50 basis points.
That cut in the target rate at which commercial banks borrow and lend their excess reserves to each other overnight is expected by forecasters to be followed by a further reduction of 50 basis points between the remaining two FOMC meetings this year. Additional cuts of 100 basis points in 2025 and 50 basis points in 2026 currently are anticipated to reach a rate of 2.9% that may hold through 2027.
Four Real Estate Investment Trusts to Buy Amid Falling Rates: Perry's Prediction
REITs pay their shareholders at least 90% of taxable income, own properties that typically produce reliable rent payments and offer enhanced appeal because they have limited correlation to the stock market. A big fan of REITs as interest rates fall is Bryan Perry, who heads the Cash Machine investment newsletter.
Perry wrote in his October 2024 issue of Cash Machine that real estate investment trusts (REITs), consumer staples and utilities were among those seeing strong inflows of investment capital. He followed up in his November 2024 newsletter to report that his recommendation of AGNC Investment Corp. (AGNC) is profitable, aided by a dividend yield of 13.89%.
As one of the largest mortgage real estate investment trusts (mREITs), AGNC stands to benefit from potentially tighter mortgage spreads as fixed income volatility eases and rates begin to come down.
Bryan Perry, head of Cash Machine and Quick Income Trader, recommends REITs.
Four Real Estate Investment Trusts to Buy Amid Falling Rates: AGNC Assessed
AGNC's business revolves around investing in agency mortgage-backed securities. These investments are underwritten with collateralized borrowings in the form of repurchase agreements (REPOS), Perry explained. Interest is generated from the company's investments, and the difference after paying their borrowing costs is what funds the dividends, he added.
Investing in mREITs that borrow short-term REPOS and are leveraging 30-year investment grade agency mortgage-backed securities in a market where yields are trending lower has historically been a winning trade, as book values tend to rise in this environment, Perry continued. If the Fed does embark on a streak of rate cuts over the next year or so, liquid government debt instruments will appreciate, he wrote in Cash Machine.
With a reduced-rate environment, borrowing costs to service the leverage in the REIT's portfolio are lowered. That should translate into higher profit margins as the REIT locks in yields at current rates, Perry wrote to his subscribers.
"Let's put high long-term mortgage rates to work for us," Perry advised.
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Click here now for the full story. Click Here... | | | | Four Real Estate Investment Trusts to Buy Amid Falling Rates: CSRSX
Bob Carlson, who heads the Retirement Watch investment newsletter, recently recommended Cohen & Steers Realty Shares (CSRSX) to his subscribers to help them profit amid the budding recovery of REITs.
REITs are bouncing back, helped by reduced interest rates and solid growth, Carlson wrote to his Retirement Watch subscribers. In addition, REITs sell at discounts to privately owned real estate and the stock market in general, he added.
CSRSX always has had a focused portfolio and now is seizing opportunities in key sectors, such as telecommunications, data centers and health care, Carlson continued. It is really the most sensible way to invest in artificial intelligence because it concentrates on the infrastructure, he added.
Bob Carlson, head of Retirement Watch, meets with Paul Dykewicz.
Four Real Estate Investment Trusts to Buy Amid Falling Rates: Carlson's Counsel
Traditional commercial real estate is a small part of the fund, including hotels, shopping centers and office buildings. CSRSX dipped 2.73% in the last month, but rose 9.56% in the past three months, 13.84% for the year to date and 33.67% during the last year.
"A big advantage of CSRSX is that it doesn't track an index," Carlson wrote to his newsletter subscribers. "It determines which sectors of commercial real estate are likely to do well in the current economic environment and buys the highest-quality REITs in those sectors. That enables the fund to downplay office buildings, malls, shopping centers, and other lagging sectors in favor of data centers, telecommunications towers, health care and more."
CSRSX also buys relatively few REITs, focusing instead on its managers' best ideas, Carlson continued. Recently, CSRSX held 34 securities with the 10 largest positions composing 63% of the fund. It offers a current dividend yield of 2.59%.
Chart courtesy of www.stockcharts.com | | | It's election season and some stocks are about to absolutely shock Wall Street.
The biggest question: which ones?
See The Forecasts for the Top 3 'Electionomics' Stocks > Click Here... | | | | Four Real Estate Investment Trusts to Buy Amid Falling Rates: Ares Management
Mark Skousen and Jim Woods, the leaders of the Fast Money Alert advisory service, helped their subscribers earn profits of roughly 18% in about five months by recommending Ares Management Corporation (NYSE: ARES), a global alternative investment manager that offers clients complementary primary and secondary investment opportunities across the credit, real estate, private equity and infrastructure asset classes. ARES offers a modest dividend yield of 2.28%.
Ben Franklin scion Mark Skousen, who heads Fast Money Alert and Forecasts & Strategies, talks to Paul Dykewicz.
The REIT seeks to provide flexible capital to support businesses and create value for its stakeholders and within our communities. By collaborating across our investment groups, we aim to deliver consistent and attractive investment returns throughout market cycles.
Jim Woods, a ex-U.S. Army paratrooper, leads Successful Investing and co-heads Fast Money Alert.
RBC Capital recently raised the firm's price target on Ares Management to $170 from $150, while keeping an "outperform rating" on the shares, according to a research note previewing third-quarter results for U.S. Asset Managers. RBC wrote that fixed income organic growth in the sector likely further improve sequentially during the third quarter.
Ares Management Corporation announced on Oct. 9 that it has priced an offering of $750,000,000 aggregate principal amount of its 5.600% Senior Notes due 2054. The notes will be fully and unconditionally guaranteed by Ares Holdings L.P. and its related business units.
Chart courtesy of www.stockcharts.com
Four Real Estate Investment Trusts to Buy Amid Falling Rates: Digital Realty Trust
Michelle Connell, the head of Portia Capital in Dallas, indicated that she is positive on Austin, Texas-based Digital Realty Trust (NYSE: DLR), a REIT that benefits from artificial intelligence (AI) and the need for data centers. DLR is a global provider of cloud- and carrier-neutral data center, colocation, and interconnection solutions that recently announced it amended, extended and upsized its existing $3.75 billion senior unsecured multi-currency global revolving credit facility to $4.2 billion.
DLR owns 300 data centers across the world, putting an emphasis on providing sophisticated outsourcing services to companies that do not desire to make the expensive investment in large database centers, Connell counseled. REITs typically do well when interest rates are declining, and that includes DLR, she added.
In addition, due to the critical need for databases, DLR is less economically sensitive compared to other types of REITs, such as malls and hotels, Connell continued. For that reason, Connell said she would expect DLR to be more stable if interest rates are volatile compared REITs involved with malls and hotels, she added.
"DLR has strong fundamentals," Connell commented.
Michelle Connell heads Portia Capital.
With a yield of over 3%, it's never missed a dividend payment, Connell continued. The REIT's share price has climbed 1.43% in the past month, 1.84% in the last three months, 22.51% so far this year and 35.47% in the past 12 months.
"While DLR is up 22% year to date, I believe it still possesses upside of 10-15% over the next 12 months," Connell predicted.
Several Wall Street analysts have recently increased their price targets on DLR, added Connell, who advised investors to establish a position at this point and add to it on pullbacks.
Chart courtesy of www.stockcharts.com
The four real estate investment trusts to buy as the Fed plans to cut rates provide paths to profit. The likelihood of rate cuts for the next 12-18 months puts these positions in a positive light for those seeking to pump up their portfolios with rising share prices and enticing dividend payouts. | | | Sincerely,
Paul Dykewicz, Editor
StockInvestor.com
| | About Paul Dykewicz: Paul Dykewicz is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, Seeking Alpha, GuruFocus and other publications and websites. Paul is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is the editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul also is the author of an inspirational book, "Holy Smokes! Golden Guidance from Notre Dame's Championship Chaplain", with a foreword by former national championship-winning football coach Lou Holtz. Follow Paul on Twitter @PaulDykewicz. | | | | | |
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