One of the best things about real estate investment trusts (REITs) is a variety of asset classes, allowing investors to choose from subsectors as well as the ability to select an investment based on recent dividend income or momentum.
Some income investors buy REITs strictly for high-yielding dividends. Other REIT investors seek continued growth. But sometimes, it’s possible to have both.
Take a look at three different REITs with dividend yields above 8%. Used to underperform in 2022 but has recently become one of the best performing REITs in the one- and four-week timeframes.
Western Asset Mortgage Capital Corp. (NYSE: WMC) is a Salt Lake City-based diversified mortgage finance institution REIT (mREIT) focused on procuring undervalued mortgage properties. Western Asset Mortgage Capital is externally managed by Western Asset Management Company LLC, which invests in agency residential mortgage-backed securities (RMBSes), non-agency mortgage-backed securities management (MBSes) and asset-backed securities (ABSes).
Western Asset Mortgage Capital had a bad 2022, losing 54.5% from January to mid-December. Since then, it has gained 19.95% in 4 weeks and 8.05% in 5. last trading day.
The $0.60 per share dividend was cut to $0.40 per share in April 2022 but has been steady since. An annual dividend of $1.60 per share yields 15.4%.
Global Health REIT Inc. (NYSE: GMRE) is a healthcare REIT based in Bethesda, Maryland, that owns specialized facilities it leases to healthcare systems and physician groups. Global Medical REIT owns and operates 189 buildings with more than 4.8 million square feet of net leaseable space across the United States. It had an average rent increase of 2.1%.
The Global Health REIT pays a quarterly dividend of $0.21 or $0.84 annually, currently yielding 8.01%. In 2022, the Global Health REIT has a total return of negative 42.35%.
But in the past five days, the global health REIT has grown 5.22% and has produced a four-week gain of 13.41%.
Office Property Income Trust (NASDAQ: OPI) is a Newton, Massachusetts-based real estate company that owns, leases, and manages office space. Its 162 properties across 31 states have a solid tenant base, including a high percentage of government offices.
Even so, the Office Properties Income Trust has been on a steady decline in revenue and earnings per share (EPS) over the past three years. The occupancy rate of 90.7% is still a bit low but represents a recent increase from 89.4%.
The Office Properties Income Trust pays a quarterly dividend of $0.55 per share, or $2.20 annually, which currently yields 12.9%. The Office Properties Income Trust fell about 40% in 2022, hitting a 52-week low in mid-October of $12.21, but has since rebounded to more than $17 a share.
As for performance in shorter time frames, the Office Properties Trust has grown by 4.41% over the past five days. The 24.71% gain in four weeks is even more impressive.
There is always a caution to be taken with very high dividend yields, as some companies have high dividend yields due to poor performance and may be at risk of a dividend cut. Investors should always do adequate research and due diligence before investing in any stock, especially those with very high dividend yields.
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