Looking to retire? Consider these top FTSE 100 dividend investment trusts
While it may now be easier to generate a real income return following the recent fall in inflation, dividend stocks could prove to be highly popular over the medium term. Brexit risks remain in play and with there being a matter of months until a withdrawal treaty is set to be finalised, uncertainty surrounding the UK economy could begin to build.
As a result, a weaker pound and higher inflation could return. As such, dividend shares could become more highly valued by investors. With that in mind, here are two real estate investment trusts (REITs) which could be worth considering for the long term.
Thursday saw FTSE 100 REIT British Land(LSE: BLND) report its full-year results. They showed a robust performance, with it having made strategic and operational progress.
Although its underlying profit declined by 2% to £380m, this was largely because of £1.5bn in net sales of income producing assets over the last two financial years. The proceeds from the sales have been partly reinvested in growth projects, with debt also being reduced and a share buyback having been started.
The company's net asset value increased by 5.7% to 967p during the year. This puts it on a price-to-book (P/B) ratio of just 0.7, which suggests that it offers a wide margin of safety. And with a dividend yield of 4.6%, it appears to offer scope for significant income and capital growth potential over the long run.
Certainly, there are risks to its future performance. The prospects for the UK economy remain uncertain, and this could hurt demand for its various offerings. However, with a solid track record and an enviable asset base, British Land seems to be a relatively appealing stock at the present time.
Warehousing and light industrial property specialist Segro(LSE: SGRO) appears to have a bright future. The company looks set to benefit from resilient demand within its key sectors, with its bottom line forecast to rise by 10% per annum in each of the next two years. This could prompt an improvement in investor sentiment and lead to a higher share price after its rise of 32% in the last year.
A fast-rising bottom line could mean that dividend growth improves. Although Segro's shareholder payouts have risen by just 2.9% per annum in the last four years, they are expected to increase by almost 8% per year over the next two years. This puts the stock on a forward dividend yield of 3%, with the potential for further growth to take place over the medium term.
With the company starting the current financial year positively, according to its recent trading update, it appears to have a bright outlook. The increasing popularity of online shopping could provide a tailwind for the warehousing industry, with demand for space continuing to rise.
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Peter Stephens owns shares of British Land Co. The Motley Fool UK has recommended British Land Co. 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.