The Average American Retires at 62. Buying These 2 Stocks Now Could Make Your Retirement Much More Comfortable
Saturday, Feb 1, 2025 8:13 am ET
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As the average American retires at 62, it's crucial to plan for a comfortable retirement. Inflation is a significant factor to consider, as it erodes the purchasing power of your savings. To combat this, consider investing in stocks that offer high dividends and have the potential for capital appreciation. Today, we'll explore two undervalued REITs (Real Estate Investment Trusts) that could make your retirement more comfortable: Uniti Group (UNIT) and Macerich (MAC).

1. Uniti Group (UNIT)
Uniti Group is a REIT with about 135,000 route miles of fiber in the United States, primarily in the Southeast. It reports its business in two segments: leasing and fiber. Leasing currently makes up about 75% of total revenue and consists mostly of its master lease agreement with Windstream. Uniti was spun out of Windstream in 2015 with a substantial portion of Windstream's network assets and immediately leased the entire portfolio back for Windstream's exclusive use. Other leasing revenue stems from sale-leaseback transactions with other fiber holders. Uniti generates fiber revenue by leasing dark and lit fiber to wireless carriers and other enterprises.
Uniti Group's stock has had a rough ride over the past year, but its financial results remain very predictable, with its Windstream lease still making up most of its revenue and nearly 90% of EBITDA. The company took steps in the quarter to solidify its financial footing. Morningstar analyst Matthew Dolgin maintains a $12 fair value estimate for UNIT, suggesting that the stock is currently undervalued. With a forward dividend yield of 15.63%, Uniti Group is an attractive buy for income-focused investors.
2. Macerich (MAC)
Macerich is a REIT that has successfully repositioned over the past decade as a true owner and operator of Class A regional malls. Over the past 10 years, the company has sold over $4 billion in mostly lower-quality assets, either directly owned or owned through joint ventures, and recycled the capital into acquiring new Class A malls, buying out its partners' shares in the unconsolidated portfolio, or redeveloping its own portfolio. As a result, the company's portfolio should produce higher tenant sales productivity, occupancy levels, and rent, and it is in a much better position to face the economic headwinds of e-commerce. Morningstar analyst Kevin Brown maintains a $26.50 fair value estimate for MAC, suggesting that the stock is currently undervalued. With a forward dividend yield of 6.62%, Macerich is another attractive buy for income-focused investors.

In conclusion, Uniti Group and Macerich are two undervalued REITs that offer attractive discounted prices while still offering investors income through high dividend yields. By investing in these stocks, you can potentially increase your retirement income and make your golden years more comfortable. However, it's essential to remember that all investments come with some level of risk, and it's crucial to do thorough research and consider your personal financial situation before making any investment decisions. Consult with a financial advisor if you're unsure about how to proceed.