“Final Four” is a catchy term and will signal maximum excitement to NCAA Men’s Division 1 Basketball Tournament fans as we see which teams make up the “Elite Eight” winning games on March 26th.
But if you’re an income investor who doesn’t want to risk dividend cuts during a long period of market turmoil that may be followed by a recession, a Jefferies analyst team led by Jonathan Petersen has already narrowed down a group of 76 public real estate investments Trusts to your own “back four”. These are companies with solid track records for increasing payouts, which Petersen expects to continue doing for the next three years.
A REIT is a company that owns real estate or invests in mortgage-backed securities and returns at least 90% of its earnings as dividends to shareholders in exchange for tax benefits. Most dividends received by investors are taxed as ordinary income.
There are two broad types of REITs. A stock REIT owns and leases real estate. A mortgage REIT will either act as a lender or invest in mortgage-backed securities, or both.
Narrowing down an “elite eight” of REITs to the “bottom four”
In a March 17 report, Peterson wrote that of 76 publicly traded US REITs that have been in existence for at least 15 years, only 22 have avoided cutting their dividends. Noting that “the list of steadfast dividend payers isn’t heavily biased toward any one sub-sector,” he added, the key to picking the best performers over the next 15 years “comes down to the quality and durability of the current dividend.”
For its “elite eight” REITs, Jefferies narrowed the list to companies with “solid dividend prospects,” before narrowing it down further to its “last four,” which were rated “buy” and on the company’s “conviction list.” .
Here are the Jefferies’ “elite eight” REIT stocks, with the “bottom four” in bold topping the list. Each group is sorted by current dividend yield. The rightmost column contains Jefferies’ expected compound annual growth rates (CAGR) for dividend payments from 2022 to 2025.
|
Pursue |
ticker |
concentration |
dividend yield |
Expected three-year dividend CAGR |
|
National Storage Affiliates Trust | NSA,
-0.64% | self storage | 5.25% | 4.0% |
|
LXP Industrial Trust | LXP,
-1.96% | Warehousing and Logistics | 5.03% | 7.4% |
|
Healthpeak Properties Inc. | SUMMIT,
-3.34% | healthcare | 5.61% | 3.1% |
|
VICI Properties Inc. | VICI,
-1.09% | leisure properties | 4.93% | 7.2% |
Play and Leisure Real Estate Inc. | GLPI,
-0.58% | leisure properties | 5.73% | 2.4% |
Acadia Realty Trust | AKR,
-4.44% | retail trade | 5.28% | 5.9% |
Realty Income Corp. | Oh,
-1.19% | retail trade | 4.90% | 3.0% |
Kimco Realty Corp. | kim,
-3.13% | retail trade | 5.01% | 2.7% |
Source: FactSet |
Click on the tickers to learn more about each REIT. If you’re interested in an individual stock, it’s best to do your own research and form your own opinion on how successful a company will be for at least the next decade.
Read Tomi Kilgore’s in-depth guide to the wealth of information available for free on MarketWatch’s prices page.
Do not miss: 10 US Banks That Have Generated the Best Earnings Over the Last 15 Years — Are Some of Them Bargain Stocks Now?
March madness for REITs? Here are the “last four” for investors seeking dividend income.
“Final Four” is a catchy term and will signal maximum excitement to NCAA Men’s Division 1 Basketball Tournament fans as we see which teams make up the “Elite Eight” winning games on March 26th.
But if you’re an income investor who doesn’t want to risk dividend cuts during a long period of market turmoil that may be followed by a recession, a Jefferies analyst team led by Jonathan Petersen has already narrowed down a group of 76 public real estate investments Trusts to your own “back four”. These are companies with solid track records for increasing payouts, which Petersen expects to continue doing for the next three years.
A REIT is a company that owns real estate or invests in mortgage-backed securities and returns at least 90% of its earnings as dividends to shareholders in exchange for tax benefits. Most dividends received by investors are taxed as ordinary income.
There are two broad types of REITs. A stock REIT owns and leases real estate. A mortgage REIT will either act as a lender or invest in mortgage-backed securities, or both.
Narrowing down an “elite eight” of REITs to the “bottom four”
In a March 17 report, Peterson wrote that of 76 publicly traded US REITs that have been in existence for at least 15 years, only 22 have avoided cutting their dividends. Noting that “the list of steadfast dividend payers isn’t heavily biased toward any one sub-sector,” he added, the key to picking the best performers over the next 15 years “comes down to the quality and durability of the current dividend.”
For its “elite eight” REITs, Jefferies narrowed the list to companies with “solid dividend prospects,” before narrowing it down further to its “last four,” which were rated “buy” and on the company’s “conviction list.” .
Here are the Jefferies’ “elite eight” REIT stocks, with the “bottom four” in bold topping the list. Each group is sorted by current dividend yield. The rightmost column contains Jefferies’ expected compound annual growth rates (CAGR) for dividend payments from 2022 to 2025.
NSA,
-0.64%
self storage
5.25%
4.0%
LXP,
-1.96%
Warehousing and Logistics
5.03%
7.4%
SUMMIT,
-3.34%
healthcare
5.61%
3.1%
VICI,
-1.09%
leisure properties
4.93%
7.2%
Play and Leisure Real Estate Inc.
GLPI,
-0.58%
leisure properties
5.73%
2.4%
Acadia Realty Trust
AKR,
-4.44%
retail trade
5.28%
5.9%
Realty Income Corp.
Oh,
-1.19%
retail trade
4.90%
3.0%
Kimco Realty Corp.
kim,
-3.13%
retail trade
5.01%
2.7%
Source: FactSet
Click on the tickers to learn more about each REIT. If you’re interested in an individual stock, it’s best to do your own research and form your own opinion on how successful a company will be for at least the next decade.
Read Tomi Kilgore’s in-depth guide to the wealth of information available for free on MarketWatch’s prices page.
Do not miss: 10 US Banks That Have Generated the Best Earnings Over the Last 15 Years — Are Some of Them Bargain Stocks Now?
Source : www.marketwatch.com