1 Magnificent High-Yield Stock Down 50% to Buy and Hold Forever

It is never good news when a stock loses half its value, but that's exactly what has happened to Rexford Industrial (NYSE: REXR). That drop has pushed its dividend yield up to an attractive 4.2%. However, what's most interesting is the business that backs that yield. Here's why you might want to buy and hold Rexford forever.

What went wrong with Rexford's business?

Normally, when a stock loses half of its value, there's a very negative development to blame. That's not really the case with Rexford. The primary issue is investor sentiment, combined with what are essentially normal market dynamics. It all traces back to the coronavirus pandemic, when consumers were forced to shop online because many physical stores were closed.

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More online shopping meant that online retailers needed to expand their warehouse capacity. These types of industrial assets comprise a significant portion of what Rexford owns (it also owns light manufacturing assets).

However, there's another important wrinkle. Rexford is exclusively focused on industrial properties in Southern California. That's a key gateway for products coming from Asia. Investors took this pair of facts and sent Rexford's stock skyrocketing.

Therefore, a portion of Rexford's share price decline is largely attributed to investor sentiment. When the world learned to live with COVID-19, investor enthusiasm faded around Rexford and other e-commerce fulfillment plays.

Rexford's core remains strong

To be fair, Rexford's business has softened. However, it hasn't been cut in half. In fact, the business is still growing, albeit at a slower pace than before.

One of the big factors investors should watch is Rexford's ability to raise rents. In the third quarter of 2025, new leases were signed at rates 25.6% higher than those of the expiring leases. Renewal lease rates rose to 26.5%. That suggests that demand remains strong in the real estate investment trust's (REIT's) core Southern California market.

However, this isn't at all surprising, as the region has performed well compared to other regions for a long time. Vacancy rates tend to be lower in Southern California, and barriers to entry for new supply are quite high. If an industrial REIT had to pick a single region on which to focus, Rexford's selection looks like a good one. In fact, the company actually increased its full-year adjusted funds from operations (FFO) outlook a touch when it reported third-quarter 2025 earnings.

Rexford isn't a company that is performing poorly. It looks more like a company that Wall Street misunderstands. This is why the 4.3% dividend yield, backed by more than a decade of dividend growth, is so compelling.

While it is unlikely that Rexford will suddenly find itself in the limelight again, it's very probable that it will continue to execute well in a desirable property market. After all, that's exactly what it has been doing for years. That, in turn, should allow dividend growth to continue for years to come.

Take the contrarian view with Rexford

Far too often, investors rush to buy a stock in a lemming-like fashion, driven by a short-term narrative. That happened with Rexford during the COVID pandemic. However, the REIT has a very strong foundation for continued success. That hasn't changed, even though investors have moved on from the COVID story that drove the shares higher.

If you have a contrarian streak, Rexford's huge price decline is likely to be an opportunity for you to buy a well-run, high-yield stock and hold for the long term. Sure, you will be out of step with the current artificial intelligence (AI) investment trend, but given Rexford's lofty yield, growing dividend, and strong business fundamentals, why would you care?

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.