The current stock market environment presents challenges for investors seeking attractively priced long-term investments, with many indexes reaching all-time highs and valuations appearing elevated. However, there are notable exceptions among high-dividend stocks, particularly in the realm of real estate investment trusts (REITs). Two REITs, in particular, offer promising opportunities for growth and wealth accumulation, both trading for under $50.
Healthpeak Properties is a leading REIT specializing in healthcare properties, with a diverse portfolio that includes outpatient medical facilities, lab facilities, and continuing care retirement communities (CCRCs). Despite a challenging growth climate for REITs driven by high interest rates, Healthpeak has successfully navigated these waters by enhancing its value through strategic acquisitions, including its recent purchase of Physicians Realty Trust. The company’s dividend yield stands at an attractive 6.4%, supported by solid profit margins, and it trades at around 10.3 times its 2025 funds from operations (FFO) guidance—significantly lower than the average price-to-earnings (P/E) ratio for S&P 500 companies.
Another promising option is Tanger Factory Outlet Centers, which operates in the outlet mall segment. This retail model has shown resilience against economic downturns and e-commerce competition. Over the past three years, Tanger’s core FFO has grown at an annualized rate of 7.5%, and tenant sales per square foot have surged by 17% compared to pre-pandemic levels. The recent quarter saw notable rent increases, highlighting the strong demand and long-term growth potential embedded within Tanger’s portfolio, as a significant portion of its leases are set to mature in the coming years.
Tanger boasts a robust balance sheet with debt levels aligned with its strategic goals and has opportunities for expansion through both new acquisitions and development projects. Its current valuation is appealing, with a price of approximately 14.6 times its 2025 FFO guidance and a dividend yield of 3.5%. The company’s low payout ratio of 51% reinforces its capacity for future dividend increases.
For those new to REIT investing, it’s essential to recognize that these assets are designed to function as long-term wealth-building instruments. With a favorable entry point currently available, investors may find that a patient investment strategy could yield substantial rewards over time, creating a reliable passive income stream alongside capital appreciation.
