My goal with the e-FinancialWriter REIT Index is to show how real estate can provide attractive returns in good times and bad. I plan to accomplish that with approximately 10 REIT stocks across several sectors of the economy. There are now eight in three sectors: Self-storage, health care, and
The strategy is working ...
The Index is up 25.44% since I introduced you to my first REIT, Public Storage (PSA), on 3/14/10.
And today, I’m adding a fourth sector, retail properties.
- The Department of Commerce reported that December 2011 retail and food services sales were up 6.5% from one year ago.
- Total sales for the full year 2011 were up 7.7% from 2010.
- Total sales excluding autos for all of 2011 were up 7.3% from 2010.
- Personal savings rate went down in 2011, falling to 3.7% from 5%.
Americans buying more, saving less — I see a trend here!
Plus this is an election year. That means it’s a safe bet we won’t see any tax increases; and the administration will do everything possible to cut unemployment, pump up the economy, and keep consumers spending.
With that backdrop, I like the single-tenant, free-standing retail sector.
These are the REITS that have tenants such as convenience stores, full-service restaurants, and automotive parts stores. They’re the kind of places you probably shop at several times a month … to fill up your car, have a moderately priced sit-down lunch, or buy some wiper blades for the car.
National Retail Properties (NNN) is my pick. It’s well-diversified, with 1,298 properties in 47 states. Almost half of the holdings are in the south and southeast
The stock has returned an average of 11.4% a year over the past 3 years, for the period ending 9/30/11, including dividends. The returns and dividends have been slightly above the sector’s average.
And speaking of dividends, NNN is one of only 105 out of the more than 10,000 publicly-traded companies to have increased dividends for 22 or more consecutive years.
So starting this week keep your eye on NNN and the other REITs in my Index.