Crazy March for REITs? These are the ‘last four’ for investors looking for dividend income.
“Four Finals” is an eye-catching term and should signal the utmost excitement for NCAA Men’s First Division Basketball fans, as we see which team wins the games out of the “eight.” elite team” on March 26.
But if you’re an income-seeking investor who doesn’t want to risk cutting your dividend during a long period of market turmoil. could be followed by a recession, a team of analysts at Jefferies led by Jonathan Petersen has narrowed a group of 76 publicly traded real estate investment trusts down to their own “last four”. These are companies with a good track record of increasing payouts that Petersen expects to continue to do so over the next three years.
A REIT is a company that owns assets or invests in mortgage-backed securities and distributes at least 90% of its earnings to shareholders as dividends, in exchange for tax advantages. Most dividends that investors receive are taxed as ordinary income.
There are two broad types of REITs. An equity REIT holds the property and leases it. Mortgage REITs act as either a lender or an investor in mortgage-backed securities, or both.
Narrowing down the elite “eight” REITs to the “last four”
In a report on March 17, Peterson wrote that of the 76 publicly traded US REITs that have been around for at least 15 years, only 22 were able to avoid their dividend cuts. . He noted that “the list of companies that pay solid dividends is not too important for a sub-sector,” adding that the key to selecting the best performers over the next 15 years “is based on quality and durability of current dividends.”
For its “eight elite” REIT, Jefferies narrowed the list down to companies with “solid dividend prospects,” before narrowing it down further to the “last four” they ranked. buy” and is on the “reliable list” of the company.
Here are the “eight stocks” of Jefferies REITs, with the “last four” in bold and at the top of the list. Each group is sorted by current dividend yield. The rightmost column has Jefferies’ projected compound annual growth rate (CAGR) for dividend payments from 2022 to 2025.
| Company | share | Concentration | dividend yield | CAGR expected dividend in 3 years |
| Trust National Archives |
NSA, |
Private Repository |
5.25% |
4.0% |
| LXP Industry Confidence |
LXP, |
Warehousing and logistics |
5.03% |
7.4% |
| Properties Healthpeak Inc. |
PEAK, |
Health care |
5.61% |
3.1% |
| VICI Attribute Company |
VICI, |
entertainment property |
4.93% |
7.2% |
|
Gaming and Entertainment Property Inc. |
GLPI, |
entertainment property |
5.73% |
2.4% |
|
Acadia Realty Trust |
AKR, |
Retail |
5.28% |
5.9% |
|
Real estate income company |
UMBRELLA, |
Retail |
4.90% |
3.0% |
|
Kimco Real Estate Group |
NEEDLE, |
Retail |
5.01% |
2.7% |
|
Source: FactSet |
||||
Click on the codes to know more about each REIT. If you’re interested in any individual stock, it’s best to do your own research and form your own opinion on how successful a company will be at least over the next decade.
Read Tomi Kilgore’s detailed guide to a wealth of information is freely available on the MarketWatch quotes page.
Do not miss: Top 10 US banks with the best earnings of the past 15 years – are any of them a bargain right now?
