REITs have become favorites of many investors as they offer the opportunity to possess high-priced real estate and enable investors to earn regular dividend income, eventually boosting their capital. Aspects like portfolio diversification and long-term growth opportunities further make them attractive.

Given this backdrop, fundamentally sound high-yield REITs Public Storage (PSA), NNN REIT, Inc. (NNN), and STAG Industrial, Inc. (STAG) could be ideal investments to anchor your income portfolio in 2025.

REITs have remained a strong contender in the securities market, appealing to varied investors with their consistent cash flow, resilience against the market, and long-term growth prospects. The REIT market is expected to grow to $350.20 billion by 2028, at a CAGR of 2.9%, driven by the increasing demand for real estate assets.

REIT’s regular dividend payment attracts investors seeking regular passive income, which can also increase gradually. These reliable income returns have been the key drivers of the industry’s impressive performance. Real estate companies distribute at least 90% of their taxable income to holders of their units or shares as dividends.

Further, in 2024, industrial and retail REITs showed the highest dividend growth, with 14.2% and 11% growth, respectively. Following the same trend in 2025, the largest dividend growth is expected to be in industrial REITs at 14.4%.

Real estate companies generally maintain reliable income streams derived from long and stable tenant leases. They offer investors dividend income and capital appreciation and can act as a safeguard against market volatility, posing REITs as a suitable investment choice.

Considering such encouraging industry sentiments, let’s look at the fundamentals of the three best REIT stocks.

Public Storage (PSA)

PSA is a member of the S&P 500. The REIT primarily acquires, develops, owns, and operates self-storage facilities. On September 30, 2024, PSA owned and/or operated 3,333 self-storage facilities located in 40 states with approximately 241 million net rentable square feet in the United States.

On August 1, PSA’s Board of Trustees declared a regular quarterly common dividend of $3.00 per common share. The Board also declared dividends with respect to its various series of preferred shares. The dividends were paid on September 30, 2024, to shareholders of record as of September 13, 2024.

PSA pays an annual dividend of $12, which translates to a yield of 4.05% at the current share price. Its four-year average dividend yield is 4.29%. Moreover, the company’s dividend payouts have increased at a CAGR of 14.5% over the past three years.

For the third quarter, which ended September 30, 2024, PSA reported total revenues of $1.19 billion, which is up 3.8% from the prior year’s quarter. Net income allocable to common shareholders totaled $380.71 million and $2.16 per common share for the quarter.

Furthermore, the company’s core FFO allocable to common shares was $738.24 million and $4.20 per share, respectively.

For the fourth quarter, which ended December 2024, PSA’s revenue is expected to increase by 2.1% year-over-year to $1.18 billion. For the same quarter, its FFO is expected to increase 0.9% year-over-year to $4.24. Also, PSA surpassed the consensus revenue estimates in all of the trailing four quarters.

Over the past six months, the stock has soared 3.9% to close the last trading session at $296.58.

PSA’s solid outlook is reflected in its POWR Ratings. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

The stock has a B grade for Stability and Quality. Within the REITs – Industrial industry, PSA is ranked #4 out of 19 stocks.

Click here to access additional PSA ratings (Growth, Value, Momentum, and Sentiment).

NNN REIT, Inc. (NNN)

NNN invests primarily in high-quality retail properties subject generally to long-term, net leases. As of December 31, 2023, the REIT owned 3,532 properties in 49 states with a gross leasable area of about 36 million square feet and a weighted average remaining lease term of 10.1 years.

On October 15, NNN’s Board of Directors announced a quarterly dividend of $0.58 per share, which was paid on November 15, 2024, to shareholders of record as of October 31, 2024.

NNN’s annual dividend of $2.32 equates to a yield of 5.78% at the current share price. Its four-year average dividend yield is 5.01%. Also, the company’s dividend payouts have increased at a CAGR of 2.9% over the past three years. NNN has raised its dividend for 34 consecutive years.

During the third quarter that ended September 30, 2024, NNN’s revenues increased 6.5% year-over-year to $218.56 million. Its earnings from operations were $143.55 million. The company’s net earnings amounted to $97.90 million and $0.53 per share for the quarter.

In addition, the company’s AFFO came in at $155.70 million and $0.84 per share, indicating growths of 5% and 2.4% year-over-year, respectively.

Street expects NNN’s revenue and FFO for the fiscal year (ended December 2024) to increase 4.4% and 1.7% year-over-year to $864.25 million and $3.32, respectively. Further, the company has surpassed the consensus revenue and FFO estimates in each of the trailing four quarters, which is promising.

NNN’s shares have declined 5.2% over the past six months to close the last trading session at $40.11.

NNN’s sound fundamentals are reflected in its POWR Ratings. The stock has a B grade for Quality and Stability. Within the REITs – Retail industry, NNN is ranked #6 among the 30 stocks.

In addition to the POWR Ratings highlighted above, you can check NNN’s Sentiment, Growth, Value, and Momentum ratings here.

STAG Industrial, Inc. (STAG)

STAG is focused on the acquisition, ownership, and operation of industrial properties. The company’s platform is designed to identify properties for acquisition that offer relative value across CBRE-EA Tier 1 industrial real estate markets, industries, and tenants.

On October 9, STAG declared its monthly common stock dividend of $0.123333 per share, reflecting its commitment to consistent shareholder returns. The company pays an annual dividend of $1.48, which translates to a dividend yield of 4.48% at the prevailing price levels. Its four-year average dividend yield is 4.07%. STAG has raised its dividend for 12 consecutive years.

During the third quarter that ended September 30, 2024, STAG’s total revenue grew 6.4% from the year-ago value to $190.74 million. Net income attributable to common stockholders stood at $41.81 million or $0.23 per share for the period.

Furthermore, its core FFO rose 1.8% and 1.7% from the prior year’s quarter to $110.77 million and $0.60 per share.

Street expects STAG’s revenue for the fourth quarter (ended December 2024) to increase 6.2% year-over-year to $194.72 million, and its FFO for the same period is expected to grow 1.4% year-over-year to $0.60. Furthermore, the company surpassed the consensus FFO and revenue estimates in each of the trailing four quarters.

STAG’s stock has slumped 8.3% over the past six months to close the last trading session at $33.

STAG’s strong prospects are reflected in its POWR Ratings. STAG has a B grade for Stability. It is ranked #8 among the 19 stocks within the REITs – Industrial industry.

To see the other ratings of STAG for Quality, Sentiment, Momentum, Growth and Value, click here.

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PSA shares were trading at $300.53 per share on Friday afternoon, up $3.95 (+1.33%). Year-to-date, PSA has gained 0.36%, versus a 0.97% rise in the benchmark S&P 500 index during the same period.

About the Author: Rjkumari Saxena

Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions. More...

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