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Best 4 REIT to buy as a hedge against inflation

Mircea Vasiu

Inflation is a major concern in the United States, as the YoY rate in February reached 7.9%. So what are the best REITs to buy as an alternative investment?

Inflation in the United States is running at rates not seen in more than four decades, triggering a change in the Federal Reserve’s rhetoric. The central bank hiked the rates last week by 25bp, and now it is contemplating raising them again at the next meeting, this time by 50bp.

Gold failed so far to protect against inflation, but other alternative investments might do so. One is real estate, and the most cost-effective way to get exposure to the real estate sector as a stock market investor is to buy REITs or Real Estate Investment Trusts.

These companies invest in all types of real estate projects and give back to shareholders more than 90% of their revenues. Here are four names to consider: CareTrust REIT (CTRE), New York Mortgage Trust (NYMT), Office Properties Income Trust (OPI), and Service Properties Trust (SVC).

CareTrust REIT (CTRE)

CareTrust is a health care REIT involved in administering and owning seniors housing and other healthcare-related properties. Its revenues are expected to reach $194.07 million in December 2022, and the stock price could not surpass $24 in the last three years.

CareTrust has a forward dividend yield of 5.89%, and the payout ratio is 145.21%.

New York Mortgage Trust (NYMT)

New York Mortgage Trust has an even higher dividend yield, 10.72%, and the payout ratio is 105.26%. This is a mortgage REIT investing in single-family and multi-family residential assets in the US.

Office Properties Income Trust (OPI)

As the name suggests, this is a company operating as an office REIT. It leases to government entities and single tenants with high credit quality ratings, and the forward dividend yield is 8.86%.

Service Properties Trust (SVC)

Service Properties Trust operates as a hotel and resort REIT from Newton, Massachusetts. It owns hotels in the US, Canada, and Puerto Rico, and at the current market price is valued at $1.43 billion.