Friday, May 30, 2008

Top REIT's Yielding Over 10%

If you are looking for a high income and you think that real estate has bottomed out, you should take a look at real estate investment trusts, which avoid taxation at the corporate level because they pass through at least 90% of their taxable income to their shareholders. Sometimes a portion of the income may be non-taxable.

All of the following stocks have yields of 10% or more, PE ratios below 17, and PEG ratios below 2.2. Remember, dividends are subject to change or termination, however, most of these stocks have been paying dividends for at least a few years.

Arbor Realty Trust, Inc. (ABR) is a debt oriented REIT that invests in real estate bridge and mezzanine loans, mortgage-backed securities, and discounted mortgage notes. They have paid quarterly dividends since 2004. This company pays a yield of 17.6%, the stock has a PE of 3 and a PEG of 0.39 .

Gramercy Capital Corp. (GKK) is a debt REIT that holds first mortgage loans, mezzanine financing, preferred equity bridge loans, and permanent loans. They have paid quarterly dividends since 2004. This company pays a yield of 15.4%, the stock has a PE of 3 and a PEG of 0.37 .

Northstar Realty Finance Corp. (NRF) is a commercial oriented REIT that invests in mortgages secured by income-producing real estate properties, commercial mortgage backed securities, REIT unsecured debt, and credit tenant loans, and net lease properties. They have paid quarterly dividends since 2005. This company pays a yield of 14.5%. The stock has a PE of 3 and a PEG of 0.48 .

Anthracite Capital Inc. (AHR) is a commercial oriented REIT that invests in commercial mortgage-backed securities also known as CMBS, secured debt backed, mezzanine loan financing and equity. They have paid quarterly dividends since 1998. This company pays a yield of 12.7%. The stock has a PE of 6 and a PEG of 1.27 .

Capital Trust, Inc. (CT) is a REIT that invests in structured commercial real estate mortgage investments, B Notes, subordinated CMBS, corporate mezzanine loans, first mortgage loans, and real estate mezzanine loans. They have paid quarterly dividends since 1987. This company pays a yield of 11.2%. The stock has a PE of 6 and a PEG of 0.91 .

Annaly Capital Management, Inc. (NLY) is a REIT that invests in mortgage pass-through certificates, collateralized mortgage obligations, agency callable debentures, and FHA and FNMA loans. They have paid quarterly dividends since 1997. This company pays a yield of 10.7%. The stock has a PE of 12 and a PEG of 1.88 .

GMH Communities Trust (GCT) is a REIT that housing specializes in housing for college and university students, along with military housing. They have paid quarterly dividends since 2004. This company pays a yield of 10.0%. The stock has a PE of 16 and a PEG of 2.19 .

If you like high income stocks, you should also look at high yield utility stocks and you might also want to look at monthly dividend stocks.

Author does not own any of the above.

By Fred Fuld at Stockerblog.com

5 comments:

Manu said...

prepairing to start a REIT, all comments welcome.

Manu said...

perpairing to start REIT, welcome all comments. grandfinance@gmail.com

REIT Wrecks said...

Don't touch Anthracite. They invest primarily in "controlling class" CMBS. This is a fancy euphemism to describe subordinated CMBS paper - the very eye of the storm. They are in default and in forbearance discussions with their bondholders, and have been since early April. That's a lot of talking; who knows where it will end up.

Northstar is one of the best, but last quarter even they paid their REIT dividends in stock.

I don't mean to put all REITs in the dog house, but do be careful if you are about to push the button on any of these names.

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