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This Week's Top Growth & Income Stocks

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REITs have been quite popular this year due to their juicy dividends in the current ultra-low rate environment. They are required to distribute at least 90% of their taxable income to shareholders annually in the form of dividends.

REITs may continue to do well in the coming months as rates are expected to be lower for longer. Even though the economic data of late has been better than expected, I think chances of a Fed rate hike before the Presidential election are rather low. If they decide to raise rates due to an improving economy, the pace will be very slow.

Investors should remember that if the rise in rates is slow and due to a growing economy, REITs are likely to be less affected. Higher occupancy and rents may offset the impact of slightly higher interest rates. Another reason to own REITs is their low correlation with stocks and bonds, so they add diversification benefits to a portfolio.

Omega Healthcare Investors (OHI)

It is the largest publicly traded REIT in the US dedicated to Skilled Nursing Facilities (SNFs). Their current portfolio consists of approximately 90% SNFs and 10% Assisted Living Facilities. They are nicely diversified across geographies and operators.

They have a strong dividend payment record. Earlier this month, they increased their dividend again; it was their 16 consecutive quarterly dividend increase and it took the dividend yield to more than 6.5%. In fact, through 2015, Omega is the #1 healthcare REIT in total shareholder return for the last 10 years.

Their growth profile also looks quite encouraging with $650 million in new investments planned for this year alone.

It’s a Zacks Rank #2 (Buy) stock with a Growth score of “B”.

Apple Hospitality REIT (APLE)

It is one of the largest and best capitalized lodging REITs in the US. They own a high quality, geographically diversified portfolio of upscale, select service hotels diversified across the Hilton and Marriott brands located mainly in urban and high-end suburban markets in 32 states. Their current portfolio holds about 180 hotels, with approximately 23,000 guestrooms.

With their portfolio of newer and high quality properties, they are likely to outperform their peers. Also, with their strong balance sheet they are well positioned to grow.

It’s a Zacks Rank #2 (Buy) stock with a Growth score of “B”.


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