The Overlooked Sector Paying 5%+ Yields That Wall Street Keeps Quiet About

"While everyone debates whether tech stocks are overvalued and whether bond yields will settle lower, an entire sector of income-producing real estate companies is paying 5% yields backed by tangible assets and inflation-indexed leases. These are not speculative plays or companies stretching to maintain payouts, they are established operators with decades of dividend growth and business models that generate predictable cash flow."

"The traditional knock on REITs is that rising interest rates kill their valuations, and the logic is simple: higher rates make REIT dividends less attractive compared to bonds, and their debt gets more expensive to service. The problem is that the narrative breaks down when you look at what is actually happening in 2026 as interest rates are coming down, which removes the headwinds that REITs have experienced over the past few years."

REITs remain relatively overlooked, creating investment opportunities for income-focused investors. Many REITs currently yield around 5% and include rent escalators tied to CPI or fixed annual increases, providing inflation protection. Established REITs exhibit decades of dividend growth and business models that generate predictable cash flow rather than speculative payouts. Falling interest rates in 2026 are easing prior valuation headwinds. REITs must distribute 90% of taxable income, which keeps yields elevated and supports regular payouts. The most well-positioned REITs are raising rents, expanding property bases, and increasing distributions despite shifting market conditions.

Read at 24/7 Wall St.