3 Top-Ranked REITs for Dividend Investors to Buy for 2020

The Dow, S&P 500, and Nasdaq all jumped to new intraday highs Monday on the back of the initial U.S.-China trade war truce. In other trade news, House Democrats last week announced their support for the new United States, Mexico, Canada Agreement to replace NAFTA.

On top of that, corporate earnings growth is projected to return in 2020 and U.S. unemployment rests at 50-year lows. Therefore, stocks could continue to climb in 2020. Still, it never hurts to strengthen your portfolio with some dividend-paying stocks, and Real Estate Investment Trusts are a great place to look.

REITs are companies that own, operate, or finance real estate properties that produce income, such as apartment complexes or retail locations. These companies are heavily regulated and must meet a number of qualifications to be classified as a REIT.

We should note that instead of earnings, REITs report funds from operations or FFO, but investors can view them as essentially the same for our purposes. Meanwhile, one distinct advantage is that REITs must pay at least 90% of their taxable income in dividends to shareholders. Clearly, this means REITs are great options for income investors.

Now let’s dive into three highly-ranked REITs we found with our Zacks Stock Screener that dividend investors might want to buy heading into 2020…

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Sun Communities, Inc. SUI” data-reactid=”23″>Sun Communities, Inc. SUI

Sun Communities is a REIT that operates in the manufactured home and recreational vehicle communities space and boasts a portfolio of over 389 communities as of the end of September. SUI, which operates across the U.S. and in Ontario, Canada, saw its sales surge 13% during the first nine months of 2019.

Sun Communities shares have surged 46% in the past 12 months and 100% in the last three years to crush its industry’s roughly 20% climb during both stretches. Despite the strong run, SUI stock closed regular trading Monday at $151.86 per share, which marked a roughly 9% discount against its 52-week highs. On the technical side, SUI stock recently slipped below its 50-day moving average, which it has rarely stayed for long over the last three-plus years.

Our Zacks estimates call for SUI’s full-year fiscal 2019 sales to jump nearly 8% above 2018’s 14.7% revenue growth. The REIT’s 2020 revenues are then projected to climb 7.1% above our current-year estimate to reach $1.3 billion. At the bottom end, SUI’s core FFO is projected to jump roughly 7% above last year’s 10% expansion, with 2020 expected to come in another 9% higher at $5.32 per share.

Sun Communities’ positive bottom-line revision activity helps it earn a Zacks Rank #2 (Buy) at the moment. SUI also sports “B” grades for both Growth and Momentum in our Style Scores system and its REIT and Equity Trust – Residential industry rests in the top 31% of our more than 250 Zacks industries. And the firm’s dividend currently yields 1.96%, which comes in above the 10-year U.S. Treasury note’s 1.89%.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="VICI Properties Inc. VICI” data-reactid=”28″>VICI Properties Inc. VICI

VICI Properties is a REIT that focuses on the gaming, hospitality, and entertainment space. The firm’s portfolio features “22 market-leading gaming properties,” which includes everything from Caesars Palace CZR in Las Vegas to golf courses and nightclubs. The New York-based company said on December 6 that it officially completed the previously announced acquisition of three regional gaming properties from Eldorado Resorts ERI and separately entered into a master lease agreement with Century Casinos CNTY.

VICI currently pays an annualized dividend of $1.19 per share, for a strong 4.89% yield. This payout looks even more impressive considering that it is not artificially inflated because shares of VICI have surged 31% in 2019 to outpace its industry’s 19% average. VICI stock closed regular trading Monday just off its 52-week highs at $24.61 a share. And its fiscal 2020 bottom-line revision activity helps VICI earn a Zacks Rank #2 (Buy).

The firm’s adjusted full-year FFO is projected to pop 3.5% to $1.48 per share, with its sales expected to slip 1% based on earlier declines since Q4’s sales are expected to climb over 3%. The firm’s Q1 fiscal 2020 revenue is projected to jump 13.5% from the prior-year quarter. VICI’s full-year 2020 sales are then expected to surge 27% to $1.13 billion to help lift the bottom-line by 12%.