There are just over 150 publicly traded REITs with a dividend yield over 1%. So far in 2011 many of them have been getting favorable ratings from analysts. Buy ratings and price targets from 2 or 3 years ago hardly seem applicable now as we’ve gained a few more years of perspective on the real estate market and how the global economic crises affects us here in the U.S. For that reason we aren’t focusing on ratings from more than a year ago.
A buy rating from an analyst is a good place to start when finding stocks to add to a portfolio but a single rating should never be a reason to invest. On our dividend blog we try to identify high growth REITs with the most upside potential based on dividend growth and fundamentals.
REITs should make up a portion of every dividend investors portfolio. Their high yields and potential for capital appreciation make them an attractive addition for every income investor. REITs have been sold off in the last part of 2011 creating good value and high dividend yields. Today we are highlighting 5 high yield REITs that analysts have been upgrading in the last year. Each of these REITs has a dividend yield over 4%.
LTC Properties (LTC)
LTC Properties is a healthcare REIT that mostly invests in senior and long term care properties. These properties provide skilled nursing services, assisted living and independent living options. The REIT invests through mortgage loans and leases.
LTC was most recently upgraded to a buy by Stifel Nicolaus in March of 2011 but was also upgraded by JMP Securities in October of 2010. LTC has a dividend yield of 6.3% and a 5 year dividend growth rate of 3.3%. LTC pays dividends monthly and have raised their dividend for the last 2 consecutive years.
Digital Realty Trust (DLR)
Digital Realty Trust is a physical property REIT that invests in technology related properties. They own, develop and manage over 90 properties around the world. Most properties are in the U.S. In the last year, Barclays initiated coverage with a overweight rating, Jefferies initiated coverage with a buy rating and FBR capital upgraded them to market perform.
DLR has near perfect dividend fundamentals making it one of our highest rated REITs. DLR has a dividend yield of 4.1% and a 5 year dividend growth rate of 20.2%. DLR has raised its dividend for 5 consecutive years.
Hersha Hospitality Trust (HT)
Hersha Hospitality is a property REIT that invests in hotels located in central business disctricts and primary suburban office markets. Most of their 62 properties are located in the Northeast. They also have a few properties located on the West Coast.
Although Hersha was downgraded about 12 months ago it was rated a buy from Deutsche Bank when they initiated coverage in March. HT has a dividend yield of 5.7% and has raised their dividend by 10% in 2011 after a couple of years of dividend cuts.
Glimcher Realty Trust (GRT)
Glimcher Realty Trust is a physical property REIT that owns, leases and operates a portfolio of real estate properties. Their properties include shopping malls and shopping centers. Glimcher has been upgraded twice in 2011. It was first upgraded by KeyBanc Capital Markets in January from hold to buy. Then later by RBC Capital Markets from underperform to sector perform in March.
GRT has a dividend yield of 5.1% and has been paying dividends since 1994. The trust went through a series of dividend cuts in 2008 and 2009 but the dividend has remained unchanged in 2011 from 2010.
Kilroy Realty Corp (KRC)
Kilroy Realty is a self-administered physical property REIT that operates on the West Coast. They own, develop and manage class A properties in major California industrial markets. Kilroy has been upgraded twice in the last year by Stifel Nicolaus. Most recently analysts have upgraded the REIT to a buy on November 8th, 2011.
KRC has a dividend yield of 4.2%. The dividend has remained unchanged in 2011 from 2010. KRC has been paying dividends since 1997.