AMT - American Tower: A 'Wide Moat' Juggernaut That Deserves Shelf Space In Your Portfolio

2024-05-06 07:00:00 ET

Summary

• The REIT sector is facing challenges due to elevated interest rates and sticky inflation, causing the Vanguard Real Estate ETF to lose a quarter of its value.
• Real estate experts suggest investing in high-quality REITs, especially those with attractive valuations and opportunities in office spaces.
• American Tower stands out as a special REIT with strong secular growth in connectivity, a solid balance sheet, and a well-covered dividend.

This article was co-produced with Leo Nelissen.

The REIT space is in a tough spot.

Elevated rates and sticky inflation have created a very unfavorable environment for the sector.

Including dividends, the Vanguard Real Estate ETF ( VNQ ) has lost roughly a quarter of its value after peaking on the last trading day of 2021.

As we can see below, in early 2022, the market was faced with an acceleration in interest rates, as displayed by the U.S. 10-year government bond yield (inverted)....

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