These Two Boring Stocks Will Outperform Nvidia By 2025

I’m about to suggest two real estate investment trusts, or REITs, that I believe will outperform the returns of Nvidia (NASDAQ: NVDA) over the next 18 months. These aren’t just any real estate investment trusts (REITs); they have relatively “boring” business models, even by real estate standards.

Listen to me carefully. I fully understand that Nvidia stock has nearly tripled in the last year alone and is up 2,960% over the last five years. And those gains are well deserved. Nvidia has been at the heart of the AI ​​revolution, and its sales show why it has done so well for investors.

However, Nvidia is a Dear The stock trades at about 35 times trailing 12-month sales and 43 times forward earnings. Even given its growth momentum, that’s a high valuation.

Additionally, over the next two years, I believe market dynamics will shift in favor of dividend-paying value stocks.

A falling rate environment could be a huge catalyst for income stocks

Without getting into the details of an economics lesson, falling interest rates are generally a positive catalyst for income-oriented stocks, especially FPI. The simplest explanation is that when risk-free interest rates (like Treasuries and CDs) rise, this also tends to put upward pressure on stock yields. Since price and yield have an inverse relationship, rising interest rates tend to push REIT prices down. rate down the environment, the opposite is true.

Additionally, REITs tend to rely more on borrowed money than most other sectors, and lower rates translate into lower borrowing costs.

After cooler-than-expected inflation data and disappointing jobs reports, the median investor expectation is for a total of two percentage points of rate cuts from the Federal Reserve by September 2025. And I think that could be a significant catalyst for some distressed REITs.

Two stocks that could be the big winners

I have about 10 different REITs in my portfolio and I think they all have the potential to outperform in a falling rate environment. But two REITs in particular could be the biggest beneficiaries: Eastern Government Properties (NYSE: DEA) And Vici Properties (NYSE: VICI).

We’ll start with Easterly Government Properties, and to be completely honest, I don’t personally own any shares in this company – not yet anyway. If you don’t know, it’s a real estate investment trust (REIT) that owns a portfolio of properties, all occupied by a single tenant – the U.S. government and its subsidiaries. The VA is the largest tenant, and the FBI also has a significant presence in the portfolio.

Most of Easterly’s properties are core components of the agencies that operate there and generate reliable and growing revenues year after year. Easterly currently has a dividend yield of just under 8%, and the stock itself has been beaten down by more than 40% since the rate hike cycle began in early 2022. But this is a extremely Rate-sensitive REIT. Not only does the stable nature of its rental income make the stock more like a bond, but Easterly is…