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Diversified Real Estate Investment Trusts (REITs) are interesting because of huge dividend payments in combination with high diversification. The whole industry is valuated at $641 billion and offers a dividend yield of 7.4 percent. Most of the REITs have huge mortgage portfolios. A simple increase in interest rates could hit the company heavily. This will also impact the big dividend payments. A good fender for possible dividend cuts is the level of debt. The lower the current debt level, the better the financial situation of the company and the higher the possibility for sustainable dividends.

However, I screened stocks from the diversified REITs industry by best dividend stocks. 20 from 33 diversified REITs have a dividend yield of more than 5 percent (high yields). Only four of them have a debt to equity ratio of less than 0.5. Here are the results:

1. Colony Financial (NYSE:CLNY) has a market capitalization of $488.4 million, generates revenues in an amount of $42.0 million and a net income of $27.4 million. It follows P/E ratio is 10.2 and forward price to earnings ratio 7.5, Price/Sales 11.6 and Price/Book ratio 0.8. Dividend Yield: 8.9 percent. The debt to equity ratio amounts to 0.02.

2. Anworth Mortgage Asset Corporation (NYSE:ANH) has a market capitalization of $862.7 million, generates revenues in an amount of $220.2 million and a net income of $109.5 million. It follows P/E ratio is 7.4 and forward price to earnings ratio 7.2, Price/Sales 3.9 and Price/Book ratio 0.9. Dividend Yield: 14.1 percent. The debt to equity ratio amounts to 0.04.

3. Starwood Property Trust (NYSE:STWD) has a market capitalization of $1.8 billion, generates revenues in an amount of $145.9 million and a net income of $104.1 million. It follows P/E ratio is 11.8 and forward price to earnings ratio 9.6, Price/Sales 12.3 and Price/Book ratio 1.0. Dividend Yield: 9.3 percent. The debt to equity ratio amounts to 0.42.

4. Getty Realty (NYSE:GTY) has a market capitalization of $543.9 million, generates revenues in an amount of $97.4 million and a net income of $51.9 million. It follows P/E ratio is 9.6 and forward price to earnings ratio 8.4, Price/Sales 5.6 and Price/Book ratio 1.4. Dividend Yield: 6.1 percent. The debt to equity ratio amounts to 0.43.

Source: 4 High-Yield Diversified REITs With Strong Protection Against Dividend Cuts