The best stocks for inflation in 2021? 4 real estate stocks to watch


Do you have real estate stocks on your radar after the Fed meeting?

Real estate stocks have been one of the best performing sectors of the stock market recently. And it’s not hard to see why. Traditionally, Real Estate Investment Trusts (REITs) have proven to be a tremendous asset to own in literally any economic, interest rate and inflation environment. Investors often look to major real estate stocks when they anticipate higher inflation due to the pricing power of the industry. And with the real estate sector posting stronger gains than the S&P 500 in recent weeks, it shouldn’t be surprising that investors are increasingly looking for the best real estate stocks to buy.

On Wednesday, the Federal Reserve announced two potential rate hikes by the end of 2023. And that resulted in a massive sell-off in futures contracts, which was mostly expected. This came after consumer prices rose 5% in May from a year earlier, according to the US Department of Labor. This is the strongest surge in inflation in almost 13 years. If inflation continues to be a major concern for the market, there is a good chance that many will turn to real estate as a hedge against inflation.

Since real estate prices and rental income tend to keep pace with inflation, it makes sense to make a list of the top real estate stocks to buy on the stock exchange today. In addition, the real estate industry also offers respectable dividend yields which could provide passive income to investors. More importantly, you may be able to grab some of the best real estate stocks with reasonable long-term growth at decent valuations. That being said, here are four real estate stocks you might want to watch out for following the Fed meeting and Powell’s remarks.

The best real estate stocks to watch right now

Omega Health Investors

Omega Healthcare Investors (OHI) is one healthcare real estate investment trust (REIT) that you’ll want to take a closer look at. To begin with, OHI owns senior housing properties, with an emphasis on nursing homes. And as the novel coronavirus tends to have the worst impact on the elderly, IHO’s business has been severely affected over the past year. Fortunately, the occupancy rate started to return in 2021 thanks to massive vaccination efforts.

Investors may want to consider this healthcare REIT as it is currently experiencing an 18-year streak of annual dividend hikes. Of course, there are headwinds for the healthcare IPF, as we are still in the midst of a pandemic. But what probably makes OHI stock an attractive investment is its large dividend yield of 7.1%. Since the US government has also been very supportive of providing assistance, this should give Omega tenants a breathing space. With all of this in mind, OHI stocks may be worth a look if you like real estate stocks.

Source: TD Ameritrade CGU

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Real estate income

No list of the best real estate stocks is complete without Realty Income. While many REITs pay monthly dividends, that company’s monthly payment is a crucial part of its identity. In fact, the company actually registered a trademark “The monthly dividend companyAs his official nickname. Look no further if you want secure and consistent payment for your wallet. The REIT even boasts on its homepage of its 610 consecutive monthly dividends paid and annualized dividend growth of 4.4% since 1994.

What makes Realty Income a great investment is its strong customer base. After all, it has top tenants like Walmart (NYSE: WMT) and Dollar General (NYSE: DG). And these tenants should continue to do well and generate stable revenue for the business. With the economy slowly reopening, Realty Income’s hardest hit tenants, such as movie theater and gym operators, should experience a strong recovery. So, would you add the O share to your portfolio?

best real estate stocks (O share)Source: TD Ameritrade CGU

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EPR properties

If you’ve been following financial news lately, you’ve probably seen stock headlines from memes like AMC Entertainment (NYSE: AMC) making big waves in the stock market. But one REIT that could be a quiet beneficiary of the meme market frenzy is EPR Properties. For those unfamiliar with it, EPR Properties invests in entertainment properties and the AMC movie chain happens to be its biggest tenant.

The company is poised to benefit enormously from the complete reopening of the economy. With properties such as cinemas, ski resorts, wellness and fitness centers, amusement parks and more, EPR stock is easily one of the best reopening stocks to have. on your watch list. A post-pandemic reset and a thirst for leisure spending after an unprecedented year presents a great opportunity for investors. With EPR shares still trading around 24% lower than in early 2020, there could be plenty of room for a rise as the reopening continues.

best real estate stocks to buy right now (EPR stock)Source: TD Ameritrade CGU

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Simon Real Estate Group

Upcoming, Simon Property Group is one of the largest REITs and shopping center operators in the United States. The growth of e-commerce has raised concerns that physical purchases will be greatly affected. And I don’t blame you for that, as most of us would agree that shopping online has brought us great convenience. But one thing we need to recognize is that the in-person shopping experience is hard to replicate. In fact, it’s probably something many would dream of during this pandemic.

Now that shopping centers are reopening across the United States, this is great news for Simon Property Group. After all, it is the largest mall owner in the country with 203+ properties. While the retail landscape is still suffering from the pandemic, Simon was able to exceed analysts’ expectations. While the surge in retail sales is likely a combination of pent-up demand and government stimulus aid, downside risks in demand and foot traffic remain. However, with the economy reopening, would you bet on SPG stock?

best real estate actions (SPG action)Source: TD Ameritrade CGU

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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