REXR - Forget AGNC Investment Buy This Magnificent Dividend Growth Stock Instead
2024-05-11 16:21:00 ET
If you are a dividend investor, you probably care a great deal about dividend yields. That's basically the big attraction when it comes to AGNC Investment (NASDAQ: AGNC) and its huge 15% yield. When comparing that to the relatively modest 3.7% yield on offer from Rexford Industrial (NYSE: REXR) , you might be tempted to pass on Rexford. There's an important difference here on the dividend front that you shouldn't ignore and it'll likely make Rexford a better long-term dividend stock for most investors.
AGNC Investment is a mortgage real estate investment trust (REIT). That means it buys mortgages that have been packed into bond-like securities, providing shareholders with direct exposure to the mortgage market. This is not an easy business and AGNC's value is tied to the publicly traded mortgage bonds it buys. In many ways, it is more like a mutual fund than a typical REIT.
Rexford is a typical REIT. It buys physical properties and leases them out to tenants. In this case, Rexford is highly focused on the industrial property type and geographically on the Southern California market. That concentration increases risk, but Southern California is the largest and usually best-positioned industrial market in the United States. Rents are buttressed by a lack of property, strict zoning laws, and the trend of industrial assets being converted to housing.
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Forget AGNC Investment, Buy This Magnificent Dividend Growth Stock Instead