2 great REITs for your Roth IRA in 2022

Real estate investment trusts, or REITs, make excellent retirement investments, thanks to their high yields and favorable tax structure. However, some look particularly attractive right now. In this crazy live Video clip, recorded on January 21Fool.com contributors Matt Frankel and Jason Hall explain why they think REP properties (NYSE: EPR) and STORE Capital (NYSE: STOR) could make excellent investments in your Roth IRA.


Matt Frankel: Alex says, “Hi, are there any good REITs for growth and income in a Roth IRA?” My short answer is all of them. If you don’t want to guess, the Vanguard Real Estate ETF (NYSEMKT:VNQ), VNQ is a big one. If I had extra money in a Roth IRA right now, there are a few in particular I would look at. The EPR is one of my favorites right now. The new COVID wave, it’s going to be a short-term thing. I think almost every expert agrees that this one goes up and then down. For this reason, they invest in experiential properties and it is only investors’ fears and unease about the situation.

They’ve really backed off in the last two weeks. Great track record, great management team. They are the only REIT that is solely focused on space. They plan to invest heavily over the next few years in things like gaming properties, golf attractions, TopGolf is one of their major tenants. Ski stations, Vail Resorts (NYSE:MTN) is one of their big tenants. They pay monthly dividends, and because the stock price is dragged down, it’s almost 7% yield right now. It is an account that is ideal for any type of tax advantage account simply because of the high and sustainable dividend yield.

The main holding of my personal Roth IRA is Real estate income (NYSE:O). The stock symbol is O. It was the first real estate investment trust I ever bought. I think there is still a lot of room to grow. They have an unrivaled track record of creating value without volatility. Go ahead.

Jason Hall: I’ll put another one too. I think STORE Capital is so underrated right now. STORE Capital ticker STOR, focuses on resistance relative to e-commerce, real estate, a lot of very large tenants who actually a lot of them know they have their own assets if they go back and they sell to STORE Capital, and then they sign a lease, so they do the sale-leaseback agreements, and then they lease those properties under long-term agreements.

I was just looking at the stock and thinking about it recently, and here’s what happened. The stock price over the past five years is obviously the coronavirus crash, but it’s still down 25%. It has fallen more than 10% in the last month or so. As a result, the dividend yield is again close to 5%. It’s 4.85%, and the dividend is super safe. It is very secure, there is no risk for the company. Their spaces are rented, their tenants pay, they grow their business. I think now is a very good opportunity to buy STORE Capital. I love it.

Frankel: There are a few hassles with every investment. I wouldn’t say they are all risk free, but the ones we mentioned are very durable and resilient, I guess that’s the right word.

Room: Absolutely, yes because it has dropped 12% in the last six weeks. He could keep falling. It is certainly possible. But I think if you own it for five years, 10 years, 20 years in a REIT, you’ll be very happy to own it.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end consulting service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.

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