3 real estate stocks that can offer attractive returns

Top real estate stocks are defying market headwinds with remarkable resilience. Despite mortgage rates rising to record highs over the past two decades, the US housing market continues to show tremendous strength. Property prices remain on an upward trajectory and the persistent growth is mainly fueled by a significant imbalance between supply and demand. Market resilience is underscored by superb demand and tight credit standards, which reduce overall risk.

That said, in this environment, betting on the best high yielding real estate stocks is an effective strategy. High-yielding real estate stocks offer stable dividend income and can be raised without breaking the bank. Moreover, adding these stocks can diversify your portfolio and provide massive upside potential for significant capital appreciation. These three real estate stocks stand out, offering an excellent combination of growth potential and regular dividend income.

Cousins ​​Properties (CUZ)

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Properties of cousins (NYSE:CUZ) is a leading REIT specializing in Class A office space in the Sun Belt. This focus on the Sun Belt region has positioned the firm as a top player in its niche. The area has seen economic and demographic growth leading to increased demand for office space.

Moreover, its high-quality properties attract high-income customers, ensuring stable rental income and low vacancy rates. Additionally, the post-pandemic shift to modern, flexible workspaces adds to the REIT case. In addition, it has made some smart acquisitions of late, which has helped it grow its top and bottom lines at an encouraging pace.

Despite the headwinds, recent results are largely in line with historical single-digit growth on both lines. And, CUZ stock has grown at an excellent pace, with a 48% increase in value over the past nine months. More importantly, the yield is over 4.7%, increasing its payout for the past five consecutive years.

Income from real estate (O)

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Real estate income (NYSE:A) is a noted REIT popularly known as the “Monthly Dividend Company”. It focuses on retail, industrial and data centers in the US and Europe. The firm demonstrates solid portfolio health with an impressive 98.6% occupancy rate and over 100% rent recovery rate. This consistent performance significantly boosts investor confidence while cementing its reputation as a strong source of monthly income.

Additionally, the REIT is equally compelling, delivering $3.25 billion in net operating cash flow and $2.36 billion in free cash flow over the trailing 12 months. These numbers highlight the firm’s operational efficiency and ability to generate substantial cash from its diversified asset base. Its dividend yield stands at a superb 5.21%, with 26 consecutive years of expanding dividend payouts. Realty will continue to grow shareholder returns as we move forward, with anticipated AFFO growth of 2.8%, significantly higher than AFFO growth of 2% year-over-year (YOY). With its financial flexibility, Realty Income efficiently navigates reinvestment, debt management and dividend distribution, making it a reliable dividend play.

CTO Real Estate Growth (CTO)

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CTO Real Estate Growth (NYSE:CTO) is another great REIT that stands out from the crowd for its dynamic portfolio of retail properties in the vibrant Sun Belt. With a highly diversified asset portfolio, it operates in four dynamic segments, including management services, commercial lending and investments, real estate operations and income properties. It also owns mineral interests in Florida while boasting an impressive inventory of mitigation credits.

It recently announced deals covering 100,000 square feet of new leases at an attractive average rent of $27.12 per square foot. Furthermore, it announced that Regal Cinemas would be replaced by a higher paying tenant. And, it acquired a key mall property in Orlando, increasing its market share in Florida.

Additionally, the firm significantly outperforms its sector in terms of dividend yields, with a four-year average yield of 12.91%, nearly triple the sector median. Its AFFO return over the past year is 10.2%, about 56.3% above the median. It’s also important to note that it has increased its dividend payout by over 67% over the past five years.

At the time of publication, Muslim Farooque did not hold (either directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to InvestorPlace.com Publishing Guide.

At the time of publication, the responsible editor had (neither directly nor
indirectly) any positions in the securities mentioned in this article.