Tuesday, March 08, 2011
Top Ylelding REITs
It you think real estate is on the road to recovery, then one of the best ways to invest is through the use of Real Estate Investment Trusts, also known as REITs. These investments pass through almost all their income to avoid double taxation, which is what most regular corporations are subject to, once at the corporate level and once at the shareholder level.
REITs have several advantages over owning real estate directly, including liquidity, professional management, diversification, and avoidance of dealing with tenants directly.
There are numerous REITs available, so you need to do your due diligence, especially checking debt levels. REITs are available that specialize in apartments, commercial buildings, industrial properties, government buildings, medical buildings, and mortgages.
WallStreetNewsNetwork.com has just updated its list of over a dozen of the highest yielding Real Estate Investment Trusts. Yields range from 3% to over 19%, however I don't believe the extremely high yields are sustainable.
Public Storage (PSA) offers a yield of about 3%, and trades at 44 times earnings. This REIT has a narrow focus, owning and operating self-storage facilities in the United States and Europe. The company has a long track record, with monthly dividends paid since 1988.
Another example is National Health Investors Inc. (NHI) which pays a decent yield of 5.2% and has a price to earnings ratio of 19. The REIT invests in health care properties primarily in the long-term care industry. The company has been paid quarterly dividends since 1992.
LTC Properties, Inc. (LTC) which sports a yield of 5.8% and sports a PE of 24, is another long-term care real estate investment trust. This is a REIT that pays monthly dividends, and the dividend track record also dates back to 1992.
To see the entire list of high yield REITs, which can be downloaded, sorted, and updated, go to WallStreetNewsNetwork.com.
Disclosure: Author did not own any of the above at the time the article was written.