3 REITs Yielding 13% Or More That I'm Currently Considering

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Includes: ARR, CIM, NLY
by: Matt Schilling

As all three major U.S. indices were trading up on Friday, I wanted to examine three REITs that should serve to enhance any income-based portfolio. The three I've chosen all have P/E ratios under 30 and yields over 13%.

ARR Residential REIT (NYSE:ARR): Shares of ARR were trading up almost 0.4% during Friday's intraday session, making the stock very attractive at these levels. Currently trading in a 52-week range of $7.99/share to $3.54/share, ARR yields 17.3% and carries a P/E ratio of 13.13, making it attractive at these levels. On Friday, Maxim Group initiated coverage on ARR with a Buy rating on the stock. That being said, I think ARR presents potential investors with a great opportunity to establish a position especially at the $6.99/share level. If the stock drops to $6.50/share or lower I would then begin to establish a medium-sized position, and any drop below $6.20/share should allow investors to establish a much larger position.

Annaly Capital (NYSE:NLY): Shares of NLY were trading up almost 0.75% during Friday's intraday session, making the stock very attractive at these levels. Currently trading in a 52-week range of $14.05/share to $18.79/share, NLY yields 13.0% and carries a P/E ratio of 30.25, making it pretty attractive at these levels. On Wednesday, the Fed noted that it would be lowering the yield curve, which is one of the key revenue generation catalysts for many of the mREITs. That being said, I think NLY presents potential investors with a great opportunity to establish a position, especially at the $17.09/share level. If the stock drops even lower to $16.85/share, I would then begin to establish a medium-sized position, and any further drop in the stock would allow for the purchase of additional shares.

Chimera Investment (NYSE:CIM): Shares of CIM were trading down almost 2.7% during Friday's intraday session, making the stock very attractive at these levels. Currently trading in a 52-week range of $2.38/share to $3.55/share, CIM yields 16.1% and carries a P/E ratio of 4.65, making it very attractive at these levels. On Thursday, Bank of America Merrill Lynch downgraded the stock to Neutral, noting the company's portfolio is a bit more riskier then that of some of the other REITs. That being said, I think CIM presents potential investors with a great opportunity, especially with such a low P/E ratio, even though it is a bit of a risky mREIT play. If the stock drops near the $2.40/share level or lower I would begin to establish a small to medium-sized position, and any drop below $2.25/share should allow investors to establish a much larger position.

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