Economical stocks end up being affordable for a rationale, which stands as one of the difficult realities of worth investing. Typically, you need to be prepared to swim against the current and purchase unpopular stocks despite the concerns of the market. At the present time, Rexford Industrial (NYSE: REXR) and Toronto-Dominion Bank (NYSE: TD) have fallen out of favor, but this has led to both of them having historically high dividends. The moment to take action is now. Here’s why.
Rexford is concentrated on a captivating market
Concerning warehouses, Southern California stands as comparatively unique. It represents the largest industrial market in the United States. If it were singled out from the broader United States, it would be recognized as the fourth-largest industrial market globally, and it towers over twice the size of the subsequent largest U.S. market, New York and New Jersey.
Despite its vastness, its vacancy rate is lower compared to other primary U.S. markets. It faces restrictions in supply, with the demand for housing commonly prompting older industrial properties to be transformed into houses or apartments, among other things. Moreover, to add to that, there is restricted recent construction of industrial properties. Altogether, Southern California emerges as a highly appealing location to possess industrial properties, and that is why Rexford Industrial is concentrating on the region.
The real estate investment trust (REIT) recently unveiled strong financial results for the first quarter of 2024, with a 20.3% increase in funds from operations. Nonetheless, investors are anxious about the fact that rental growth rates are beginning to decelerate from the extraordinarily swift pace witnessed over the past couple of years. Although the company marginally lifted its full-year guidance, share prices still tumbled, propelling the yield towards its highest point in a decade.
REXR Chart
This occurs as a purchasing chance for long-term investors. Remarkably, Rexford anticipates that the redevelopment and repositioning of current properties will be the primary drivers of growth between 2024 and 2026. This is already integrated into the portfolio, hence there is no reason to doubt that the REIT cannot achieve this. While the dividend yield appears moderate at 3.8%, the dividend has been rising at a swift annualized rate of approximately 15% over the preceding decade, with more accelerated growth rates in latter years. If you are a dividend growth investor, Rexford emerges as both an economical and appealing…
