3 REITs That Could Help Weather the Storm of Inflation
Inflation is generally difficult for stock investors because it pushes up interest rates, negatively impacting the present value of future earnings. In many industries, rising inflation is felt through increased input and labor costs; in some cases, companies can try to pass on these costs. However, consumers have the final say, and if they won't pay higher prices, margins will suffer.
In inflationary periods, as a general rule, real estate and commodities tend to outperform. The key to succeeding in an inflationary environment is finding companies that can control costs while still benefiting from rising prices. Here are three real estate investment trusts (REITs) whose cost structures will be less impacted by inflation but benefit from rising prices.
Weyerhaeuser (NYSE: WY) is a timber REIT that owns or manages almost 25 million acres of timberlands throughout North America. Lumber prices have been on a wild ride over the past several years, starting with rapid rises during the COVID-19 pandemic. Lumber prices have fallen back but are still elevated compared to pre-pandemic levels. Weyerhaeuser is one of the biggest manufacturers of structural lumber, oriented strand board, and plywood. Its customers are primarily in the residential construction business.
Source Fool.com
