More Americans are retiring every day; and more Americans are working remotely than ever before, observes Mike Larson, income expert and editor of Safe Money Report.
And as the pandemic wanes, more Americans are reconnecting with family and friends as well as rediscovering the allure of the open road and open water.
Wouldn’t it be nice if you could profit from those trends while earning a relatively generous stream of income to boot? Enter Equity LifeStyle Properties (ELS) — a specialized real estate investment trust.
ELS focuses on manufactured home, recreational vehicle (RV) and marina properties. Specifically, it operates more than 430 communities and resorts across 33 U.S. states and in British Columbia.
The REIT owns the properties that residents and vacationers pay to site or store manufactured homes, RVs and boats for either short-term or long-term periods of time.
Given demographic, societal and employment trends, that’s a great business to be involved in. Moreover, roughly 91% of its revenue comes from stable, recurring sources like annual memberships and leases. That characteristic — and ELS’s geographic diversity — make the company very attractive.
Indeed, the REIT has grown normalized funds from operations (NFFO) per share, a standard earnings metric used by REITs, at a cumulative annual rate of 9% since the mid-2000s.
Results were solid in the first quarter, too. NFFO rose around 8% to $122.6 million, or 64 cents per share, from $113.3 million, or 59 cents per share, in the year-earlier period.
Equity LifeStyle isn’t resting on its laurels, either. The company just bought a portfolio of 11 marinas and associated RV sites for $262 million in February. That followed the acquisition of several RV, manufactured home and marina properties in Arizona, Texas, North Carolina and Florida late last year.
What about income? Well, ELS currently pays a quarterly dividend of 36.25 cents per share. That’s up almost 6% from a year ago and good for an indicated yield of 1.9% at recent prices.
Our Weiss Ratings system also just upgraded ELS shares to “Buy” territory in May. The stock is a new addition to our dynamic income model portfolio.
