Seven REIT's Yielding Over 10%

If you are looking for a high income and you think that real estate has bottomed out, you should take a look at real estate investment trusts, which avoid taxation at the corporate level because they pass through at least 90% of their taxable income to their shareholders. Sometimes a portion of the income may be non-taxable.

All of the following stocks have yields of 10% or more, P/E ratios below 17, and PEG ratios below 2.2. Dividends are subject to change or termination, however, most of these stocks have been paying dividends for at least a few years.

• Arbor Realty Trust, Inc. (ABR) is a debt-oriented REIT that invests in real estate bridge and mezzanine loans, mortgage-backed securities, and discounted mortgage notes. It has paid quarterly dividends since 2004. This company pays a yield of 17.6%. The stock has a P/E of 3 and a PEG of 0.39.
• Gramercy Capital Corp. (GKK) is a debt REIT that holds first mortgage loans, mezzanine financing, preferred equity bridge loans, and permanent loans. They have paid quarterly dividends since 2004. This company pays a yield of 15.4%. The stock has a P/E of 3 and a PEG of 0.37.
• Northstar Realty Finance Corp. (NRF) is a commercial-oriented REIT that invests in mortgages secured by income-producing real estate properties, commercial mortgage backed securities, REIT unsecured debt, and credit tenant loans, and net lease properties. It has paid quarterly dividends since 2005. This company pays a yield of 14.5%. The stock has a P/E of 3 and a PEG of 0.48.
• Anthracite Capital Inc. (AHR) is a commercial-oriented REIT that invests in commercial mortgage-backed securities also known as CMBS, secured debt backed, mezzanine loan financing and equity. It has paid quarterly dividends since 1998. This company pays a yield of 12.7%. The stock has a P/E of 6 and a PEG of 1.27.
• Capital Trust, Inc. (CT) is a REIT that invests in structured commercial real estate mortgage investments, B Notes, subordinated CMBS, corporate mezzanine loans, first mortgage loans, and real estate mezzanine loans. It has paid quarterly dividends since 1987. This company pays a yield of 11.2%. The stock has a P/E of 6 and a PEG of 0.91.
• Annaly Capital Management, Inc. (NLY) is a REIT that invests in mortgage pass-through certificates, collateralized mortgage obligations, agency callable debentures, and FHA and FNMA loans. It has paid quarterly dividends since 1997. This company pays a yield of 10.7%. The stock has a P/E of 12 and a PEG of 1.88.
• GMH Communities Trust (GCT) is a REIT that housing specializes in housing for college and university students, along with military housing. It has paid quarterly dividends since 2004. This company pays a yield of 10.0%. The stock has a P/E of 16 and a PEG of 2.19.

If you like high income stocks, you should also look at high yielding utility stocks and you might also want to look at monthly dividend stocks.

Disclosure: The author does not own any of the above.

Comments

[jjason:]

You need to add that some of these firms are MORTGAGE REIT's and could have high debt to equity ratios. Also, what about tangible book value? And the ability to continue paying dividends?

2008 Jun 05 09:28 AM

[reitguy:]

GCT is about to be taken out by ACC, they already distributed a special dividend, the company should cease to exist as a public entity within a few weeks.
Also your screen is biased towards M-REITs, there are several public REITs that own Real Real Estate with decent yields...
Also P/E is not used by anyone in the REIT arena, FFO (Funds from Operations is the preferred metric)

2008 Jun 05 09:30 AM

[nyka:]

a REIT that housing specilizes in housing? Edit your copy to avoid detractling from your credibility.

2008 Jun 05 11:05 AM

[BrotherMaynard:]

p/e and peg are pretty much worthless when valuing reits (or any financial for that matter)

where's p/b?

2008 Jun 05 04:10 PM

[jimmy46:]

most of these are down 30-50% in 30 days,
you must be the village idiot

2008 Jul 09 01:28 PM

[TwoCentsWorth:]

well, which mutual funds holding reits are worth an investment?

2008 Jul 09 06:27 PM

[droopydro:]

I know it aint so Cap'n... Annally is the smart one and aint got the taint

Jun 20 01:26 PM