Top 3 safe REITs stocks to buy in 2022

on Jun 21, 2022
  • REITs have had a difficult year as interest rates soar.
  • STORE Capital and W.P. Carey are good net lease REITs to buy.
  • Kimco shares will likely bounce back in 2022.

REITs have underperformed in 2022 as investors worry about soaring interest rates and a slowdown in global growth. The closely followed iShares Global REIT ETF has crashed by more than 20% from its year-to-date high. Here are some of the best REITs to buy in 2022 even as risks rise.

STORE Capital

STORE Capital (NYSE: STOR) is a leading REIT valued at over $7 billion. It is one of the top players in the Single Tenant Operational Real Estate industry. It has over 2,866 locations in the United States. It has 556 customers across various industries like retail, manufacturing, restaurants, and early childhood education being the top segments.

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STORE Capital uses a unique business model known as net-lease. In it, it acquires properties and then leases to their owners under triple-net lease. This means that tenants have the mandate to operate the property in line with the agreement. As such, STORE Capital is not a real estate operator. 

STOR stock price has not done well this year as its shares have dropped by more than 27% from its highest point in 2021. It is also approaching the lowest level since November 2020. Still, there is a likelihood that the shares will bounce back thanks to its high profitability, cheap valuation, and a forward dividend yield of 6%.

W.P. Carey 

W.P. Carey (NYSE: WPC) is another top REIT that is valued at over $16 billion. The company has a dividend yield of 5.11%. 

WPC has some similarities with STORE Capital. For example, they both use the net lease model, where they buy and lease buildings to customers. It has a portfolio of 1,304 properties that are leased to 352 tenants in 24 countries. 

The two have differences. For example, WPC has operations abroad. Also, it runs its business through its real estate and investment management business. 

W.P. Carey is a good REIT to invest in because of its cheap valuation, high returns, and strong balance sheet.

Kimco Realty

Kimco Realty (NYSE: KIM) is another large American REIT that has a market cap of over $11 billion. The company operates open-air, grocery-anchored shopping centers in the US. It has 514 shopping centers in the US. In 2021, it expanded its business by merging with Weingarten, another open-air market operator.

Kimco is a good REIT to buy because of its relatively cheap valuation considering that its stock has fallen by more than 28% from its 2021 high. It also has a relatively safe dividend yield of about 3.85%.

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