2 High-Yielding REITs To Consider For The Second Half Of 2012

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 |  Includes: CIM, NLY
by: Matt Schilling

As we await the results of the Federal Reserve's meeting being held Tuesday and Wednesday, I've begun to examine four REITs that may end up being both good income and growth plays throughout the second half of the year. Even though the yields are greater than 12%, these companies have demonstrated a great presence within their sector and could be seen as both income and growth plays.

Annaly Capital (NYSE:NLY) -- NLY which trades in a 52-week range of $14.05 (52-week low) and $18.79 (52-week high), yields 13.0% ($2.20) and carries a P/E ratio of 29.96 making the stock an affordable option considering its dividend. Shares have risen nearly 1.1% during the last few trading sessions and could continue to demonstrate positive growth throughout the second half of the year. The main catalyst behind NLY's second half growth should be the capital (approx. $275 million) the REIT was able to generate through its secondary offering which took place on May 16th.

The first half of the year has seen NLY rise roughly 5.7% while paying a dividend of $0.55/share in March and an expected dividend of $0.55/share for June. Analysts are expecting NLY to earn $0.49/share on revenue of $543.28 million dollars for the June 2012 quarter, and considering three of the last four quarters have missed EPS estimates; investors should still remain conservative on the company. For those looking to establish a position in the company, I'd begin with an income driven strategy and gradually add to that position as dividend dates draw closer.

Chimera Investment (NYSE:CIM) -- CIM which trades in a 52-week range of $2.38 (52-week low) and $3.62 (52-week high), yields 15.6% ($2.20) and carries a P/E ratio of 5.28 making the stock a very inexpensive option considering its dividend. Shares have risen nearly 3% during the last few trading sessions and could continue to demonstrate positive growth throughout the second half of the year.

The first half of the year has seen CIM rise roughly 11.7% while paying a dividend of $0.11/share in March and an expected dividend of $0.11/share for June. Analysts are expecting CIM to earn $0.11/share on revenue of $162.28 million dollars for the June 2012 quarter, and considering CIM has missed expectations in three of the last four quarters; investors should still remain conservative on the company. For those looking to establish a position in the company, I'd begin with a medium position and establish an income driven strategy. As the dividend dates draw closer, I'd begin to gradually add to my position.

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