Agro Sector Ideas

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Farmland Partners - >>> 2 REITs That Are Up Despite the Market Being Down


Motley Fool

By Liz Brumer-Smith

Jul 7, 2022


https://www.fool.com/investing/2022/07/07/2-reits-that-are-up-despite-the-market-being-down/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


KEY POINTS

High-quality dividend stocks can help offset some losses with reliable income.

Agree Realty is up over 1% this year and 10% over the last three years.

Farmland Partners is up close to 13% this year and over 94% in the last three years.

These 2 REITs may help offset some portfolio losses during the current bear market.


With the S&P 500, Dow Jones Industrial Average, and tech-heavy Nasdaq Composite down 21%, 15%, and 30%, respectively, investors are on the lookout for stocks that can offer some reprieve in the down market.

Dividend stocks like real estate investment trusts (REITs) are an appealing buy in volatile markets because of the consistent income they can provide. Concern over rising interest rates has hit most REITs hard. But Agree Realty (ADC -0.58%) and Farmland Partners (FPI -2.01%) are among the few REITs that are up this year.

Here's a closer look at these two winning REITs and if they are a good investment in the current bear market.


Farmland Partners

Farmland Partners, the largest REIT specializing in the ownership and leasing of farmland, is making a big comeback after several challenging years. In 2018, it entered into a lawsuit against a short seller. In early 2022, roughly four years later, Farmland was declared the winner, but the long and expensive legal battle hurt share prices and forced the REIT to cut its dividends in the interim. Thankfully, things are looking up for the company.

Around March 2022, when inflation concerns were mounting, investors' interest turned to farmland for diversification into an essential and inflation-resistant commodity -- food. Year to date, Farmland Partners' share price is up over 12%. Coupled with its recovery from the lawsuit as well as its recent pivot toward more farmland brokerage services, the company is in a solid position for continued growth.

As of Q1 2022, Farmland Partners had interest and ownership in 186,000 acres of farmland across 19 states, which includes 25,000 acres of land managed by third parties. Its new management service is a pivotal part of its long-term growth model, which was kick-started with the acquisition of Murray Wise Associations, a farmland brokerage that handles farmland auctions and farm management.

Its dividend return is low at 1.5%, the same as the S&P 500. The company is shifting away from the higher dividend-paying REIT model in order to achieve faster growth. This means investors shouldn't expect much in terms of dividend raises, but given the movement of the stock this year already, there's a good chance its price will keep rising.

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