At the time of writing, the S&P/ASX 200 Index (ASX: XJO) and All Ordinaries (ASX: XAO) are down 2.41% and 2.81% respectively. However, not all companies are in step with the market and there are a few that investors are heading to for safety.
One company which has resisted the decline of the market today is Rural Funds Group (ASX: RFF).
Who is Rural Funds?
Rural Funds is a real estate investment trust (REIT) specialising in farmland. It holds a portfolio of farmland for almonds, cotton and macadamias as well as cattle feedlots, vineyards and poultry assets. These assets, apart from being different in nature, are also spread across varying climatic regions. Rural Funds' aim is to provide investors with reliable income and growth.
Dividends
This income is provided for by the leasing out of its assets to operators. The rental income is then used to pay an increasing stream of dividends, with remaining cash used for growth through acquisition of other assets.
Currently, the weighted average lease expiry (WALE) of Rural Funds' leases is sitting at 11.5 years. With the majority of these leases being increased through fixed or CPI indexation, the ASX REIT appears to be in a position to deliver on its income return.
Insider buying
On Tuesday, Rural Funds saw some insider buying as its shares fell lower. Insider buying is often seen as a bullish sign as who knows the company better than management?
Julian Widdup and David Bryant, who are both directors, increased their indirect ownership in Rural Funds by purchasing shares on the market throughout the previous week.
How Rural Funds is performing today
At the time of writing, the Rural Funds share price is up around 8%, performing far better than the market average.
I believe investors see Rural Funds' dividend as sustainable. This is thanks to its long-term leases and tenants who operate a consumer staple – food. Couple this with the RBA's recent emergency rate cut to 0.25% and investors appear to be looking for stable income in the hands of the agricultural REIT.
Foolish takeaway
Rural Funds has been a solid performer throughout this ASX market crash. Its shares are only down a little over 8% from their 2020 high in February.
However, it is important to note that prior to this, the Rural Funds share price suffered a decline on the back of short-seller scares and it is yet to reach its 52-week high of $2.42 set in July last year.
I like Rural Funds' defensive properties, at the core of it – we all need to eat. I've owned its shares for a number of years and plan to continue well into the future.
