Real Estate Investment Trusts (REITs) had a strong performance in 2021. The closely-watched Vanguard Real Estate ETF (VNQ) rose by almost 38%, its best year in decades. Therefore, while REITs are a bit overvalued, there are some that will likely continue doing well in 2022. Here are the best REIT stocks for an income-rich 2022.
Agree Realty (NYSE: ADC) is a mid-size REIT valued at more than $5 billion. The company owns about 1,400 properties with about 29 million square feet. Its properties are generally community shopping centers located in the Midwestern and Southeastern of the US.
Agree has been in a strong growth mode. For example, its annual revenue in 2020 was more than $248 million. In the trailing twelve-month period, its revenue jumped to more than $319 million. Its profits also jumped to over $112 million.
Agree is a good REIT stock to invest in 2022. The firm has a dividend yield of about 4% and a manageable debt load. It pays its dividends monthly and has been paying them in the past 9 consecutive years. The Agree stock price has crashed by almost 15% from its 2021 high.
Innovative Industrial Properties
Innovative Industrial Properties (NYSE: IIPR) is a unique REIT because of the industry it operates in. The company offers solutions in the regulated cannabis industry in the United States. The IIPR stock price has declined by about 30% from its highest level in 2021 but there is a likelihood that it will bounce back in 2022.
IIPR leases its properties to licensed operators in states like Arizona, California, and Colorado. In total, it has more than 60 properties. As more states move to make cannabis legal, there is a likelihood that IIPR will see its business improve.
IIPR has a market capitalization of $5 billion and a dividend yield 2.18%. It has been increasing its payouts in the past four straight years, making it a good REIT stock.
American Campus Communities
American Campus Communities (NYSE: ACC) is REIT in the student housing industry. The company has a market cap of more than $7 billion and an enterprise value of over $11 billion. This means that it is a highly leveraged company that has a net debt of over $4.1 billion.
Because of the nature of its business, ACC business was affected by the Covid-19 pandemic. Its total revenue declined by over $35 million because of the stay-at-home orders. However, the ACC stock price has been in a strong bullish trend. It has risen by about 30% from its lowest level in 2021. ACC is a good REIT stock because of its safe business model and its dividend yield of more than 3%.