Latest news with #Fool.co.uk
Yahoo
04-04-2025
- Business
- Yahoo
4 REITs Fools own for passive income
Real estate investment trusts (REITs) offer a combination of high dividend yields, potential for growth, and diversification benefits, making them an attractive option to consider for investors seeking passive income. Here are a handful owned across the contract writing team! What it does: Primary Health Properties specialises in purchasing and renting primary healthcare facilities within the United Kingdom and Ireland. By Mark Hartley. Primary Health Properties (LSE: PHP) is a real estate investment trust (REIT) that benefits from stable revenue through long-term leases backed by the NHS and Irish government. This makes it a good candidate for passive income, as it's low-risk and provides consistent dividend payouts It has a long track record of dividend growth and has seen moderate price appreciation during strong economic periods. Dividends have increased consistently for over 20 years at a compound annual growth rate of 3.24%. However, the price has suffered during periods of high interest rates, ramping up borrowing costs and impacting profitability. Recent concerns about the wider property sector and potential government healthcare policy change risk hurting the share price. Despite a slight decline in performance over the past three years, revenue and earnings have typically been within 1% of expectations. This makes it attractive to income investors looking for stable and reliable performance. Mark Hartley owns shares in Primary Health Properties. What it does: Primary Health Properties owns and lets out medical facilities like GP surgeries in the UK and Ireland. By Royston Wild. Primary Health Properties offers investors the dream blend of long-term dividend growth and market-beating dividend yields. Cash rewards here have grown every year since the mid-1990s. And City analysts expect this trend to continue until at least 2026, representing 30th consecutive years of rises. As a result, the yields on Primary Health Properties for this year and next stand at 7.6% and 7.7% respectively. To put that into perspective, the current forward average for FTSE 250 stocks sits way below these levels, at 3.4%. This REIT's dividend durability reflects its focus on the ultra-defensive healthcare market, providing profits stability across the economic cycle. It's also because the lion's share of rental income is directly or indirectly guaranteed by a government body. Looking ahead, future dividends could be hurt by NHS policy changes that impact earnings. But with successive governments working to strengthen the role of primary care in Britain, the outlook here for the short-to-medium term at least looks pretty solid. Royston Wild owns shares in Primary Health Properties. What it does: Supermarket Income owns a £1.8bn portfolio of 74 stores, with the majority leased to Tesco and Sainsbury's. By Roland Head. Big UK supermarkets have regained their status as desirable retail properties since the pandemic. I added Supermarket Income REIT (LSE: SUPR) to my portfolio in July 2024, tempted by the 8%+ dividend yield and near-20% discount to book value. Admittedly, there's a risk that higher interest rates will put pressure on the dividend. But my sums suggest that this REIT will be able to refinance while maintaining its dividend. Recent changes should deliver a sharp drop in management costs. This REIT also benefits from long leases and very reliable tenants. Occupancy is 100% and so is rent payment. Property valuations also seem realistic – another area of possible concern. During the second half of 2024, Supermarket Income sold Tesco's Newmarket store back to the retailer at a price 7.4% above its latest book value. With a forecast yield of 8.3%, I'm quite happy to sit back and collect my quarterly dividends. Roland Head owns shares in Supermarket Income REIT. What it does: Warehouse REIT owns and leases a portfolio of well-positioned warehouses across the UK catering primarily to the e-commerce industry. By Zaven Boyrazian. In a world where e-commerce continues to slowly take market share from brick-and-mortar retail, demand for well-positioned warehouses is growing. This is a trend that Warehouse REIT (LSE:WHR) has been busy capitalising on since its IPO in 2017. However, with interest rates rising rapidly in 2022, real estate investment trusts have had to endure much higher financial pressures. In the case of Warehouse, that ultimately culminated in property disposals to keep debt in check. Despite this, dividends have kept flowing. And while elevated interest rates are still a cause for concern, the sell-off by investors seemed a bit overblown. It seems the private equity markets have also come to the same conclusion since acquisition offers began flying in February 2025. So far, they've all been rejected. Even after the recent rise in stock price, the shares continue to offer an attractive 6.5% dividend yield. And with demand for warehouses unlikely to slow down in the long run, the passive income potential for Warehouse REIT continues to look rock solid, in my opinion. Zaven Boyrazian owns shares in Warehouse REIT. The post 4 REITs Fools own for passive income appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool The Motley Fool UK has recommended J Sainsbury Plc, Primary Health Properties Plc, Tesco Plc, and Warehouse REIT Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025
Yahoo
15-02-2025
- Business
- Yahoo
3 S&P 500 stocks for the quantum revolution
Investing in quantum stocks comes with considerable risk due to the highly technical nature of the field. Here, we asked five contract writers to suggest a stock listed on the S&P 500 that they think investors should consider buying to potentially benefit from this emerging theme… What it does: Alphabet is the parent company of Google and a diversified technology giant with quantum ambitions. By Dr James Fox. Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) and Google's quantum ambitions have taken a leap forward with the unveiling of the Willow quantum chip in late 2024. This breakthrough device can perform complex calculations exponentially faster than classical supercomputers, completing tasks in minutes that would take traditional systems septillions of years. Google aims to demonstrate the first 'useful, beyond-classical' computation and ultimately build a large-scale quantum computer capable of tackling real-world applications. Based on publicly shared progress reports, Google seems to have a lead in the area. Looking at the company's valuation, the price appears reasonable with a forward price-to-earnings ratio of 24.1 times, slightly below its five-year average. Key risks include regulatory issues, particularly the Department of Justice's demand to split off Chrome, which could impact Android revenues. Additionally, AI competition and shifts in search behavior pose threats to Google's core business. Nonetheless, Google's strong balance sheet supports continued investments in cloud, AI and quantum technologies. And the company's quantum computing breakthroughs, if successfully commercialized, could provide a significant competitive advantage in the long term. Dr James Fox does not own shares in Alphabet. What it does: The owner of Google and YouTube, Alphabet is one of the largest technology companies in the world. By Edward Sheldon, CFA. There are a number of S&P 500 companies that offer exposure to quantum computing. Personally, I like Alphabet for exposure to the theme as it has been working on the technology for over a decade now. Late in 2024, Alphabet announced the arrival of 'Willow' – the company's latest quantum chip. And this looks very exciting. With this chip, it only takes five minutes to perform a calculation that would take one of today's fastest supercomputers 10 septillion years (10,000,000,000,000,000,000,000,000 years) to compute. So, it's incredibly powerful. Meanwhile, the chip can reduce errors exponentially as 'qubits' are scaled up. This cracks a key challenge in quantum computing that has plagued the field for decades. Of course, there are no guarantees that Alphabet will go on to be a winner in the quantum computing industry. There are also no guarantees that quantum computing itself will go mainstream. Alphabet offers exposure to many other areas of technology though. So, I see it as a relatively safe play on the theme. Edward Sheldon owns shares in Alphabet. What it does: Alphabet is an innovative technology company driving AI, search, cloud and quantum advancements. By Paul Summers: It will take quite a while before quantum computing becomes commercially viable. For this reason, picking out the likely 'winners' in 2025 is difficult. But I think Google-owner Alphabet stands a good chance of being among them. The incredibly cash-rich tech titan had another great year in 2024, significantly outperforming the S&P 500 index. Quite a lot of this extra uplift came in December, following the unveiling of its Willow chip and its ability to handle seriously complex computations that classical computers can't manage. In time, this could support areas as disparate as drug discovery, financial modelling and logistics. Of course, investors may experience a rollercoaster ride before then as technology stocks drop in and out of fashion. Alphabet can also expect to face increasing competition as other firms vie for a piece of the quantum pie. But I'd be surprised if Alphabet's best days were behind it. Paul Summers has no position in Alphabet What it does: Honeywell is a multinational conglomerate working in aerospace, automation, security and sustainable energy. By Mark Hartley. Honeywell (NASDAQ: HON) is a $142bn corporation with revenue of $36.6bn and income of $7.15bn (2023). It produces everything from aircraft engines and flight tools to safety sensors and smart building automation. It's enthusiastic about quantum computing, believing it to have significant applications in improving safety, increasing efficiency and accelerating research and development. In particular, the ability to optimise predictive analytics, run simulations and build quantum encryption is attractive. In partnership with Cambridge Quantum Computing, it formed the company Quantinuum to build quantum systems using trapped-ion technology, known for its high accuracy and scalability. However, quantum is nascent technology the benefits of which are yet to be proven. If the projects fail to bear fruit, it could lead to significant losses. What's more, it's reliant on the success of its partnership. Recent news suggests it may split its business between aerospace and automation although nothing is confirmed. Mark Hartley does not own shares in Honeywell. What it does: Microsoft is one of the S&P's 'Magnificent Seven' stocks and a powerhouse in information technology. It is a leading light in a multitude of tech segments including artificial intelligence (AI), productivity software and gaming. And through its Azure Quantum platform, Microsoft (NASDAQ:MSFT) is hoping to pioneer the new generation of ultra-fast and powerful computing. Pleasingly, it's been making huge strides here in recent times. It made headlines back in September when — alongside quantum specialist Quantinuum — it created and entangled 12 highly reliable logical qubits. According to Microsoft, this was 'the largest number of entangled logical qubits, with the highest fidelity, on record.' In simple terms, logical qubits are essential for error reduction and better stability in quantum systems. Microsoft's since broken that record, and in November announced it would launch a quantum machine with Atom Computing that features 24 logical qubits. It's taking orders for these systems, with delivery scheduled for later this year. These are early days, and development setbacks later on could hamper Microsoft's ambitious plans. But recent progress is highly encouraging. Royston Wild does not own shares in Microsoft. The post 3 S&P 500 stocks for the quantum revolution appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. The Motley Fool UK has recommended Alphabet and Microsoft. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Sign in to access your portfolio
