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This article will examine five REITs to determine if there is a place for them in your portfolio.

Chimera Investment Corporation (NYSE:CIM) Chimera has a market cap of $2.55 billion with a price to earnings ratio of 4.3. The stock has traded in a 52 week range between $2.38 and $4.36. The stock is currently trading around $2.50. On August 2nd, the company reported second quarter revenues of $195.95 million compared to revenues of $183.02 million in the second quarter of 2010. Second quarter net income was $117.84 million compared to net income of $124.57 million in the second quarter of 2010.

Chimera invest in mortgage loans that it holds onto or sales to other REITs. The mortgages that Chimera invest in are not government backed, and therefore carry significant risk. Chimera has no direct competitors.

Chimera has recently showed investors that it can be quite profitable. The company has improved net income from $-120 million in 2008 to $324 million in 2009 and in 2010 it increased net income by 64% to $533 million. The company has paid quarterly dividends since 2007 and currently pays a dividend which yields 18.80%. The company’s stock has never recovered from the collapse of the US Realty market in 2008 and 2009. The stock is currently 39.7% off of its 52 week high. I believe that investors will take note of the company’s low price (PE ratio 4.3 and price/book ratio 0.79) and high yield 18.80% and give this stock a chance. With such a high dividend yield holding shares of this stock could be worth the risk. I rate Chimera Investment Corporation as a buy.

Annaly Capital Management Inc. (NYSE:NLY) Annaly has a market cap of $15.3 billion with a price to earnings ratio of 5.87. The stock has traded in a 52 week range between $14.05 and $18.79. The stock is currently trading around $15. On August 2nd, the company reported second quarter revenues of $304 million compared to revenues of $111 million in the second quarter of 2010. Second quarter net income was $120.8 million compared to net income of $-218.2 million in the second quarter of 2010.

One of Annaly’s competitors is Capstead Mortgage Corporation (NYSE:CMO). CMO is currently trading around $11 with a market cap of $944 .3 million and a price to earnings ratio of 7.13. CMO pays a dividend which yields 15.3% versus Annaly whose dividend yields 14.4%.

Annaly is a well established REIT that has made a profit in each of the last ten years. The company has been making quarterly dividend payments since 1997 and currently pays a monster dividend which yields 14.4%. The stock price is currently off of its 52 week high but is up by 86.4% over the last three years. I think that Annaly offers investors the potential for capital appreciation, along with a steady high yield dividend income. I rate Annaly Capital Management as a buy.

HCP Inc. (NYSE:HCP) HCP has a market of $8.25 billion with a price to earnings ratio of 14.19. The stock has traded in a 52 week range between $28.76 and $40.75. The stock is currently trading around $35. On August 2nd, the company reported second quarter revenues of $496 million compared to revenues of $303 million in the second quarter of 2010. Second quarter net income was $223 million compared to net income of $70.8 million in the second quarter of 2010.

One of HCP’s competitors is health Care REIT Inc. (NYSE:HCN) HCN is currently trading around $46 with a market cap of $8.25 billion and a price to earnings ratio of 54.31. HCN pays a dividend which yields 6.1% versus HCP whose dividend yields 5.5%.

HCP has been doing an excellent job of increasing earnings. Year-over-year second quarter revenues increased by 63.6% while second quarter net income increased by 214.9%. In 2010, the company increased net income by 184% to $310 million from $109 million in 2009. In addition to strong earnings, the company has been an excellent dividend paying company. HCP has paid quarterly dividends since 1998 and has increased its dividend in each of the last five years. In spite of the tremendous earnings increases and steady a dividend, the stock price is down by 3.81% over the last 52 weeks. I think that HCP will continue to provide investors with secure earnings and a steady dividend income. I rate HCP Inc. as a buy.

General Growth Properties Inc. (NYSE:GGP) GGP has a market cap of $10.16 billion with a negative price to earnings ratio. The stock has traded in a 52 week range between $10.72 and $18.27. The current stock price is around $11. On August 3rd, the company reported second quarter revenues of $568 million, compared to revenues of $805 million in the second quarter of 2010. Second quarter net income was $-203 million compared to net income of $-118 million in the second quarter of 2010.

One of GGP’s competitors is Simon Properties Group Inc. (NYSE:SPG). SPG is currently trading around $105 with a market cap of $31 billion and a price to earnings ratio of 36.98. SPG pays a dividend which yields 2.9% versus GGP whose dividend yields 3.3%.

General Growth manages shopping malls and is the second largest REIT in the United States in terms of revenues. The company has not being doing well and had net income of $-1.28 billion in 2009 and $-1.44 billion in 2010. As a result, of the company’s poor earnings the dividend payments have been drastically reduced. Dividends were suspended in the 2009 year, and the July 13th dividend payment was one fifth the size of the July 2008 dividend payment. On August 3rd, the company announced that in order to increase shareholder value, it will spin off a 30 mall portfolio. The proceeds of the spinoff will be paid as a special dividend in the form of stock in Rouse Properties Incorporated. It is too early to know exactly how this spinoff will affect shareholders. I would advise investors to consider other REIT’s that are profitable and can pay consistent dividend income. I rate General Growth Properties Inc. as a hold.

Prologis Inc. (NYSE:PLD) Prologis has a market cap of $10.80 billion with a negative price to earnings ratio. The stock has traded in a 52 week range between $21.74 and $37.46. The current stock price is around $24. On July 28th the company reported second quarter revenues of $335.9 million, compared to revenues of $158.6 million in the second quarter of 2010. Second quarter net income was $-154.9 million compared to net income of $2.6 million in the second quarter of 2010.

One of Prologis' competitors is PS Business Parks Inc. (NYSE:PSB). PSB is currently trading around $49 with a market cap of $1.21 billion and a price to earnings ratio of 26.41. PSB pays a dividend which yields 3.6% versus Prologis whose dividend yields 4.6%.

Prologis invests in industrial distribution properties around the world. The company has lost money in four out of the last five quarters. The company has been paying dividends since 1995, and the current dividend yield is a healthy 4.6%. On July 28th the company announced disappointing second quarter earnings. Since the July 28th announcement, the stock price has decreased by 48%. The stock is 37.3% off of its 52 week high. Prologis is in a downward trend, and I would not purchase the stock at this time. The dividend is insufficient to offset the stocks capital losses. I rate Prologis Inc. as a hold.



Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 3 High-Yield REITs To Buy, 2 To Avoid