3 Top Dividend Stocks to Buy in February
The S 500 index is offering up a tiny little dividend yield of 1.2% right now. The average real estate investment trust (REIT) has a yield of 3.8%. All three of the REITs here beat that, with Rexford Industrial (NYSE: REXR) offering a fast-growing dividend and a 4.1% yield. Realty Income (NYSE: O) has a 5.8% yield backed by three decades' worth of annual dividend increases. And W.P. Carey's (NYSE: WPC) 6.4% yield was recently cut, but there's more to that story than meets the eye.
Wall Street has a bad habit of going to extremes when it gets a story in its teeth. That's what happened with Rexford Industrial during the coronavirus pandemic period. The idea that there would be more online shopping and increased near-shoring to push up demand for industrial properties, like warehouses and manufacturing facilities, pushed the prices of industrial REITs sharply higher.
Rapid rental growth backed that story, particularly at Rexford, which operates exclusively in the Southern California market. This region is among the largest industrial markets in the world, and supply is highly constrained. But trees don't grow to the sky, no matter how much investors wish they did. Rexford's rental growth rates have slowed down. In the third quarter of 2024, the REIT's rental growth was "just" 39% on expiring leases. That's huge by any normal standard, but it's actually a material drop from Rexford's peak rental growth rates.
Source Fool.com
