We looked for real estate investment trusts (REITs) worthy of attention. These operations are financially healthy and growing. With the commercial and residential real estate markets bottoming out, now is an opportunity to ride the wave on up with REITs.
Additionally, given the nature of REITs, collecting dividend payments is an added bonus. By law, REITs have to pass on 90 percent of their taxable income to stockholders.
Below are 13 REITs that you should consider for your fixed-income portfolio. Here is what we found:
PS Business Parks (PSB): This full service real estate company that specializes in leasing, property management, acquisition and development. As of February 2011, PSB traded on a 42.39 P/E ratio, and yields 1.76 percent, with a market cap of $1.41 Billion. PSB is growing and expanding, with several properties in Arizona, California, Florida, Maryland, Oregon, Texas, Virginia and Washington. Shares trade at $56.97 at the time of writing.
Apollo Commercial Real Estate Finance (ARI): This is a young company that came into being in the post-2008 world. It made all dividend payments in 2010, and the current yield is 9.4 percent and trades currently in the upper 16s. The company originates, acquires, invests in and manages commercial first mortgage loans, commercial mortgage-backed securities, mezzanine financings and other commercial real estate-related debt investments in the US.
Starwood Property Trust (STWD): Reflects the fact that the commercial and residential real estate market has turned a corner. 2010 Q1, Q2, and Q3 net incomes came in as positive. By the way, the current yield is a robust 5.25 percent. The company is focused primarily on originating, investing in, financing and managing commercial mortgage loans and other commercial real estate debt investments. It also invests in residential mortgage-backed securities and residential mortgage loans.
Retail Opportunity Investments Corporation (ROIC): ROIC is a company that specializes in acquiring, owning and leasing, and repositioning necessity based real estate, primarily in the form of well located shopping centers in residential areas. Shares trade at $11.07 and yield 2.90%.
Colony Financial (CLNY): Pays out a healthy current yield of 5.9 percent. Just like Starwood, the company turned a profit in 2010. The 52 week range is $16.50 to $21.45. Since August 2010, there is a strong and technically upward trend. The company acquires, originates and manages commercial mortgage loans in the US and Europe.
Liberty Property Trust (LRY): Is a $6.4 Billion real estate investment trust, which owns over 79.7 million square feet of office and industrial space in over 20 markets across the United States and the United Kingdom. The have a P/E ratio of 28.6216, with an annual dividend yield of 5.98%. LRY trades at $31.77 per share.
Chimera Investment (CIM): CIM is the little engine that could. It beat earnings estimates for 6 of the last 9 quarters, and pays out an aggressive current yield of 16.1 percent. The company invests in US government and private residential mortgage-backed securities representing interests in obligations backed by pools of mortgage loans.
Vornado Realty Trust (VNO): VNO is one of the largest owners and managers in the United States, specializing in sustainable building, with offices in New York City and Washington DC. Their current stock price is $85.07 with a P/E ratio of 31.9. In March 2011, VNO paid SL Green $111 Million to contribute to the $400 Million debt in the construction project of 280 Park Avenue, a 1.237 million square foot, Class A office property.
One Liberty Properties Inc. (OLP): Yields 8.7 percent with a current market price of $14.84. Currently, the market cap sits at $171.15 million. OLP is a self-administered and self-managed real estate investment trust founded in 1982. Their primary is business is to acquire, own and manage geographically diversified portfolio of retail, industrial, office and other properties under long term leases.
Washington REIT (WRE): This REIT as a current market cap of $1.92 billion and a P/E ratio of 48.32. WRE specializes in income producing real estate properties in Metro Washington, D.C. WRE has a dividend yield of 5.9 percent, currently trading at $29.09 per share.
Winthrop Realty (FUR): Based out of Boston and New York, Winthrop Realty focuses on investing and making loans secured by real estate, joint venture investments with local real estate partners and acquiring equity and debt securities. Their P/E ratio is 15.84, and currently trades at $11.42 per share.
Annaly Capital Management (NLY): Has been around since 1997, and has paid a healthy quarterly dividend going back 10 years. The most recent dividend was $0.64, which is a 14.41 percent current yield. The company invests primarily in mortgage pass-through certificates, collateralized mortgage obligations and other mortgage-backed securities representing interests in or obligations backed by pools of mortgage loans, and certificates guaranteed by Ginnie Mae, Freddie Mac or Fannie Mae.
Colonial Properties Trust (CLP): Owns and manages 34,275 apartment units and 15.1 million square feet of commercial real estate as of December 31, 2010. CLP has an annual yield of 3.2% in dividend, with a market cap of $1.41 Billion. Currently, CLP is trading at $18.05 per share.
As always, we believe these names are a good starting point for your own research. Please do your own due diligence before you consider adding a position in any of the REITs above.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.