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A Steady Ship in Choppy Waters: 2 Low-Volatility REITs Tailored for Conservative Investors

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Seeking Stability Amidst Market Uncertainty

REITs have faced a bumpy ride at the beginning of the year, with the outlook for monetary policy shifting towards a less accommodative stance. Despite this turbulence, many investors are eyeing the sector’s robust fundamentals and attractive yields. For those looking to navigate these volatile waters cautiously, two low-volatility REITs stand out.

The Rock of Diversification: W.P. Carey (WPC)

W.P. Carey (WPC) stands out in the REIT landscape, owning a diverse portfolio of commercial and industrial properties across North America. Sporting a hefty 6.2% dividend yield, WPC’s strength lies in its exceptional diversification. No single industry represents more than 10% of its tenants, with the largest tenant contributing less than 3% of total revenue.

Moreover, WPC’s unique position as a net-lease REIT brings an added layer of security. With tenants responsible for taxes, insurance, and maintenance, WPC enjoys lower risk compared to its peers. The company’s ability to negotiate rental rate increases embedded in contracts further cements its stability.

The Data Fortress: Digital Realty Trust (DLR)

Digital Realty Trust (DLR) offers exposure to the booming data center sector, providing a 3.4% yield and a consistent track record of increasing dividends since 2005. Benefiting from the surge in cloud computing over the past decade, DLR is poised for further growth as artificial intelligence takes center stage in the coming years.

DLR’s extensive network of over 300 data centers spanning 25 countries serves as the backbone for delivering technology to both consumer and commercial markets. With blue-chip customers like Meta, JPMorgan Chase, and Verizon, DLR is well-positioned to capitalize on the digital transformation.

Summing Up

Amidst the market turmoil, the appeal of REITs remains intact, driven by compelling yields and strong fundamentals. For risk-averse REIT investors, DLR and WPC present as prime choices, offering stability in uncertain times.

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

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