VNQ - 1 Magnificent Dividend Stock Down 20% to Buy and Hold Forever
2024-06-11 07:13:00 ET
Agree Realty (NYSE: ADC) is a large net lease real estate investment trust (REIT) with a 4.9% dividend yield. For reference, that's well above the 1.3% you would get from the S&P 500 index and the 4.1% of the average REIT, using the Vanguard Real Estate Index ETF (NYSEMKT: VNQ) as an industry proxy. There is a good reason for Agree's high yield, but there's also a long-term growth story here with plenty of room to run.
Agree Realty is focused on single-tenant retail properties located in the United States. These assets are generally fairly similar to each other, which makes it relatively easy to buy and sell them. It also makes it relatively easy to replace a tenant if there is a vacancy. And there is a large market for retail properties in the United States, so the property type is fairly liquid, as well. While it's true that any single location is high-risk because it's occupied by just one tenant, Agree owns over 2,100 properties. That's enough diversification to offset the risk posed by individual properties.
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1 Magnificent Dividend Stock Down 20% to Buy and Hold Forever