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3 REITs make big dividend payments


In a perfect investment world, all real estate investment trusts (REITs) would never lose 30% or more of their value, would pay safe and stable high dividends without are not cut and their money from operations will easily cover the dividend each quarter. .

But 2020 is still far from the perfect investment world, and Stock REIT is one of the worst performing stocks this year. Inflation, followed by multiple rate hikes and fears of a deep recession, has depressed the prices of most REITS, leading to higher levels of dividend yields.

But some income investors are undaunted by the volatility. As long as the dividends are steady, and they receive a steady monthly or quarterly income, they’re happy. Here are three REITs that lost big in 2020 but are now paying out big dividends with outstanding yields.

Office Property Income Trust (NASDAQ: OPI) is a Massachusetts-based real estate company that owns, leases, and manages office space. It has 171 properties with a solid tenant base, including a high percentage of government offices.

Even so, the Office Properties Income Trust has been declining in revenue and earnings per share over the past three years. The current occupancy rate of 89.4% is a bit low. Earnings per share (EPS) for the second quarter of 2022 hit negative $16 million. However, cash from operations (FFO) for that quarter was $1.22, well above the 55 cent dividend paid to shareholders.

The Office Properties Income Trust pays a $2.20 annual dividend, which currently yields a whopping 15.3%. The stock hit a recent 52-week low of $12.21 but has since rallied to more than $14 per share.

Necessity Retail REIT Inc. (NASDAQ: RTL) is a New York-based retail REIT that owns, leases, and operates outdoor and single-tenant grocery centers for long-term tenants.

Necessity Retail REIT operates more than 1,050 properties with 29 million square feet of rent across the United States, primarily in the Southeast. Its tenants include Best Buy Co. Inc., Bank of America Corp., Home Depot Inc.Publix Super Markets Inc., BJ’s Wholesale Club Holdings Inc.Burger King, Chevron Corp. and many other famous names.

The 52-week price range is $5.46 to $9.48. Necessity Retail REIT pays an annual dividend of 85 cents, currently at a rate of 14.6%. The FFO for the most recent quarter was 95 cents, so the dividend is well covered. However, this year’s revenue and EPS are different. In May, JMP Securities analyst Arron Hecht began covering the Retail Essentials REIT with a market performance rating. No new analyst ratings since.

Global Medical REIT Inc. (NYSE: GMRE) is a healthcare REIT based in Bethesda, Maryland, that owns specialized facilities that it leases to healthcare systems and physician groups. Global Medical REIT owns and operates 181 buildings across the United States and serves 227 tenants.

The 52-week range is $7.01 to $18.51 and the stock is currently about 6% above recent lows. The annual dividend is 84 cents, or 11.4%. The second quarter FFO was 24 cents, so the FFO barely paid out a 21 cent quarterly dividend.

Revenue has increased over the past two quarters, but EPS has fallen. The next earnings day is during the first week of November.

As always, bullish investors should do their homework before buying any REIT stock, but that’s especially true when considering a stock with such a high dividend yield. Such stocks are often the laggards in the market. But for income-only investors, REITs like these can be quite lucrative.

Continue reading: Fast-growing REIT Maintains 8% dividend in bear market

Details of today’s private market:

  • Palladius I Estate Foundation, LP reopened to invest in RealtyMogul communication. The fund has a target IRR of 17.5%

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