Bear markets can be scary, but that's just your emotions talking. Indeed, few investors like to see red ink, and the fear of "losing everything" is very real. However, if you can step back and see the bigger picture, market pullbacks are often great times to buy companies at relatively attractive valuations. That's the case today with Federal Realty (NYSE: FRT) and, to a lesser degree, W.P. Carey (NYSE: WPC) . Here's what you need to know.
Federal Realty owns a portfolio of around 100 outdoor shopping centers and mixed use assets. When you look at the size of its portfolio, you'll see it is one of the smaller names in the strip mall niche. And yet this company has managed to string together the longest streak of annual dividend increases in the real estate investment trust (REIT) sector. It is a Dividend King with a huge 55-year-long history of yearly dividend increases. The current yield is a generous 4%.
The big story here is that Federal Realty focuses on quality over quantity, buying well-situated properties in wealthy regions with material populations. And then it invests heavily in the assets to improve the rents it collects and the occupancy levels. When it believes it has achieved as much as it can at a property, and gets a good offer price, it sells the asset and looks for a new one. It is a process that has been successfully repeated over and over again. With its giant mixed use projects, the company spreads development over stages, so there are years of growth built into the investments.
For further details see:
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