Forget Dogecoin and Buy These 2 REITs

Dogecoin (CRYPTO:DOGE) started as a joke. Its creators wanted to make a coin that no serious investor would consider. As things turned out, the joke is on them after the cryptocurrency’s price rocketed nearly 3,000% last year. 

However, given its history, I can’t take Dogecoin seriously. While its price could continue to rise as more speculators pile in, it could just as quickly become worthless if they lose interest in the cryptocurrency.

Instead of speculating on something with a binary outcome like that, I prefer to utilize what’s called intelligent speculation, a spin on Ben Graham’s value investing. It combines the diligent research and analysis Graham preached but exchanges the margin of safety he sought for the potential of earning an above-average return instead of an adequate one. 

One sector I believe is ripe for intelligent speculation is real estate investment trusts (REITs). Here are two REITs that I think have a high probability of delivering above-average returns, making them better investment options than Dogecoin.   

1. EPR Properties Trust

EPR Properties Trust (NYSE:EPR) is a specialty REIT focused on experiential real estate like movie theaters, eat and play venues, and other types of attractions. The pandemic had an outsized impact on these properties, meaning many of EPR Properties’ tenants have struggled to pay rent. That has weighed on its stock price, which has lost nearly a third of its value over the last two years. 

However, market conditions have improved over the past year as the wide availability of vaccines and therapeutics have given people the confidence to enjoy experiences again. That’s enabling EPR’s tenants to pay rent, providing the REIT with the cash flow to reinstate its monthly dividend. At a more than 6% yield, EPR’s dividend is well above the sub-3% average in the REIT sector. 

Higher dividend yields can suggest one of two things: The payout is at high risk of a reduction, or the market has undervalued the stock. I believe the latter is the case here. EPR recently reinstated its dividend, given its confidence in its future recovery. Further, it has strengthened its balance sheet during the pandemic, putting its payout on a firmer foundation. 

That strong balance sheet gives it the financial flexibility to take advantage of opportunities to acquire more experiential real estate. While the REIT wants to reduce its exposure to movie theaters, it’s open to purchasing other property types like eat and play venues, ski facilities, experiential lodging, and gaming facilities. These deals could create even more value for shareholders in the future.

While EPR Properties is a bit more of a speculative investment, given the continued uncertainty of the pandemic, it has significant upside potential to go along with its above-average income stream.

2. SL Green Realty

SL Green Realty (NYSE:SLG) is Manhattan’s largest office…