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As e-commerce continues to transform the global retail landscape, demand for logistics and distribution centers has surged. Industrial real estate investment trusts (REITs) that specialize in owning and managing warehouses, fulfillment centers, and distribution centers are set to benefit the most from this trend – especially those with e-commerce heavyweights like Amazon.com (NASDAQ:AMZN) as its tenants.
In addition to their growth potential, REITs typically offer high dividend yields. Like all REITs, industrial REITs must pay out a significant portion of their earnings to shareholders as dividends.
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Let’s look at three industrial REITs that count Amazon among their top tenants.
Hirsch Industry
As of June 30 Hirsch Industry (NYSE:STAG) owns and manages a portfolio of 573 industrial buildings in 41 states totaling over 114 million square feet. Amazon is Stag’s largest tenant with six leases representing approximately 2.8% of annual base rent. Other notable tenants include Coca-Cola, FedEx, Tempur Sealy and DHL.
Stag currently pays a monthly dividend of $0.123333 per share, which equates to an annual dividend of $1.48 per share. At the time of this writing, this gives a share yield of approximately 3.75%.
In addition to monthly income and high yield, Stag also offers dividend growth. Since its IPO in 2011, the company has increased its annual dividend payout every year, resulting in 12 consecutive years of increases. With January’s 0.7% increase, the company is on track to mark its 13th consecutive year of increases in 2024.
Prologis
As of June 30 Prologis Inc. (NYSE:PLD) owns ownership interests in more than 5,500 industrial properties worldwide, totaling approximately 1.2 billion square feet, making it the world’s largest REIT. Amazon is Prologis’ largest tenant, with approximately 45.7 million square feet of leased space, representing 5.1% of net rent. Other notable tenants include Home Depot, FedEx, DHL and UPS.
Prologis currently pays a quarterly dividend of $0.96 per share, which equates to an annual dividend of $3.84 per share. At the time of this writing, the stock yields about 3.1%.
Like Stag, Prologis has consistently increased its dividend. The company has increased its annual dividend payout every year for the past 10 years, and with February’s 10% increase, Prologis is on track to mark its 11th consecutive year of an increase in 2024.
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EastGroup Properties, Inc.
As of June 30 EastGroup Properties (NYSE:EGP) owned and managed more than 500 industrial properties totaling approximately 56.5 million square feet. With four leases, Amazon is EastGroup’s largest tenant, representing approximately 1.8% of annual base rent. Other notable tenants include Starship Logistics, Trane and FedEx.
EastGroup currently pays a quarterly dividend of $1.27 per share, which equates to an annual dividend yield of $5.08 per share. At the time of this writing, the stock yields about 2.8%.
While EastGroup has the lowest yield of the stocks discussed in this article, it has the most impressive dividend payment track record. The company has paid dividends for 31 consecutive years, 28 of them without cuts, including increases over the past 12 years.
Better returns than some REITs?
The current high-yield environment offers incredible opportunities for income-seeking investors to earn tremendous returns, but not through REITs.
Arrived Homes, the investment platform backed by Jeff Bezos, has launched its Private Credit Fund, which offers access to a pool of short-term residential real estate-backed loans with a target net annual return of 7 to 9 percent, paid out to investors monthly. In July, the payout was 8.1 percent. And the best part? Unlike other private credit funds, the minimum investment in this one is just $100.
With long-term rates falling and short-term rates remaining high, there’s a unique opportunity to invest in fix-and-flip loans before yields fall. Check out Benzinga’s favorite high-yield deals.
This article Collect rent from Jeff Bezos’ Amazon with these 3 stocks originally appeared on Benzinga.com
