Entering text into the input field will update the search result below

Buy These Dividend Stocks Today

Mar. 05, 2018 10:03 AM ETAAPL, ARR, AVB, CYS, EQR, ESS, GOOG, INTC, MSFT, NLY, NNN, O, LFT, ORC, SCHH, T, VNQ, VZ42 Comments


  • Investors may be attracted to overvalued stocks.
  • I offer an alternative for investors seeking strong companies with attractive valuations.
  • Many REITs are significantly undervalued.
  • Preferred shares are a great way to supplement income.
  • Investors should buy AVB, EQR, VNQ, or SCHH today.

There are some sectors where investors can find attractive valuations and strong fundamentals.

Source: imgflip

Investors should be seeking to lessen the volatility of their portfolios. Buying overpriced companies often leads to high volatility. While many sectors are grossly overpriced, I will offer some alternatives.

Apartment REITs

The apartment REIT sector is a great place for investors to hunt dividends. The yields are reasonable and the growth is fairly consistent. In general, the larger apartment REITs appear to be better options. The smaller apartment REITs have more difficulty with operating expenses. Investors may be lured in by the higher dividend yields, but I would strongly favor the bigger players with stronger balance sheets.

There is no reason for investors to believe that a recession is eminent, but a strong balance sheet is good financial planning. Equity Residential (EQR) is one such apartment REIT. They have a great portfolio and an excellent balance sheet. Their operating expenses devour a very small portion of their revenue.

AvalonBay (AVB) is another great apartment REIT. They are set apart by their exceptional skill in developing new properties. Essex Property Trust (ESS) is the third of the great apartment REITs. Essex has their entire portfolio located on the West Coast. Most of the allocation is in California. The properties appear excellent. However, the valuation is a bit higher. Management of Essex appears more willing to increase leverage. I prefer to see very strict discipline on leverage.

I have full reports of Equity Residential, AvalonBay, and Essex Property Trust on The REIT Forum. (subscription required)

Triple net lease REITs

Many investors love the triple net lease REIT space. Realty Income Corporation (O) and National Retail Properties (NNN) are a couple of the most loved REITs in the world. The triple net lease REITs carry

The REIT Forum is the home of the best research on REITs and preferred shares. The Forum’s portfolio has returned over 20% every full year since inception.

You will have access to spreadsheets of every REIT and preferred share we cover updated in real time. The spreadsheets have easy to follow buy/hold/sell ratings. Subscribers get instant actionable SMS alerts on time sensitive investments.

A highly knowledgeable and interactive chat room, with 65/65 5-star ratings, is great for both new and mature investors. Join The REIT Forum for 2018 with weekly preferred share updates and rapid fire roundups for common stocks.

This article was written by

Home to the best research on REITs.

If you'd like to try the service, use this link: get 10% off The REIT Forum.

Colorado Wealth Management is a REIT specialist who began his decades-long investment career in a family-owned realtor office before launching his own company and embracing his drive for deep-dive REIT analysis. He passed all 3 CFA exams. He focuses on Equity REITs, Mortgage REITs, and preferred shares.

Features of the group include: Exclusive REIT focus analysis, proprietary charts and data models, real-time trade alerts posted multiple times a month, multiple subscriber-only portfolios, and access to the service's team of analysts and support staff for dialogue and questions on the REIT space.

Analyst’s Disclosure: I am/we are long AVB, EQR, NLY-F. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

No financial advice. Investors are expected to do their own due diligence and consult with a professional who knows their objectives and constraints. CWMF actively trades in preferred shares and may buy or sell anything in the sector without prior notice. Tipranks: Buy AVB, EQR, VNQ, SCHH.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (42)

tikigod18 profile picture
"so u don't want to sell something that is up 150%?? That's insane. that is exactly the time to sell it"

Funny, I am up over 300-500% on many stocks I bought in 2010, all dividend payers, increasing their dividends sometimes 2X a year. Have they corrected some? I would hope so, but the income isn't going anywhere.
Colorado Wealth Management Fund profile picture
Ideally for taxable accounts you'll never need to sell it. I'd say it depends on the situation with the valuation on the stock being the most important criteria.
...and there is ARCC,.....~ &15.70 ......recommended in Barron's roundtable for 2018.......JB, Athens, Tenn.
CompoundingDollaz profile picture
Did you stop by the wrong article?

ARCC, down 7% over the past year, and almost went extinct in the 07-09 swoon. Pass...
Colorado Wealth Management Fund profile picture
I see nothing wrong with buying a stock that had a down year. This isn't about momentum investing. I'm not familiar with ARCC, but plenty of great companies have had a down year. Even the mighty Amazon fell hard in early 2016. It was merely a buying opportunity.
CompoundingDollaz profile picture
The point wasn't that it had a down year. The point is that it's down and has proven that it doesn't have very strong legs under it like some of its peers - say, MAIN for example.
Internet Explorer is hardly a recent Microsoft product.
CWMF, do you put NRZ in the same basket as the other mREITs you listed who have cut their dividends, even though NRZ claims that rising interest rates will be nuetral to positive for them? Thx.
Colorado Wealth Management Fund profile picture
I do not. They don't fit into a basket with either residential mortgage REITs or commercial mortgage REITs.
Chromebook will be the future windows phone
Wow, these were some cliché bullet points on MSFT.
Someone does not realize how MSFT has changed, and is still changing.
Yes, Windows Phone is dead.
The Surface RT (first iteration) may have been a poor man's Chromebook, but the current generation are full blow windows productivity machines. The cheaper version tries to compete with Chromebooks and is a bit more expensive that the Google offer, but I would say Chromebook is a poor man's Surface.
Bing, and other online properties, have been losing money for years but it does look a lot healthier from the last quarterly report that it is becoming profitable, it is still some marketshare that Google does not get.
Internet Explorer is on life support for legacy compatibilty, Edge is the new, modern, browser. It had a rough start but these days it is actually pretty good, still not as slick at Chrome yet but a lot better than IE (note: I use the latest Firefox and Vivaldi browsers on PC).
Windows revenue is remarkably resilient.
Office too, which is successfully migrating to an online subscription revenue which is growing.
Azure growing like mad year or year. Do you think any big corporation threatened by Amazon want to puts its data and services on AWS?
LinkedIn is still growing and seem to find positive synergies from other MSFT online services and offerings.

When you look at the pie chart of MSFT various business revenues it looks a lot safer than having 90% of it coming just from ads.

MSFT valuation does appear a bit rich, the pullback at $85 was nice opportunity to load up, but one thing is sure MSFT is growing.
CompoundingDollaz profile picture
The recent pullback was such a gift. I bought several more batches when it cratered.

The valuation "problem" is one caused by analysts. They truly don't seem to know how to value such explosive growth and keep looking backwards for MSFT to revert to some mean.
Boy! Do I like $MSFT :)

Again, it appears reach, some of the rise to $113 is due $AMZN and $AAPL reaching $1T, the rest of the investing world is playing a guessing game of "who's next".

Will $MSFT reach $130 (and a few cents more) for a $1T ? I am sure it will but I don't know when, in the mean time I'll take the growing dividends.
Excellent analysis, CWM. It will be good to see if VZW and T can convert a friendly regulatory regime into strength for the long term... (I am long T).
Cuip99 profile picture
I agree to buy REIT ETFs, accordingly, I purchased shares in FREL. VNQ is to big now, SCHH might be okay size wise but . . . But I got a better deal at Fidelity. My brokerage is with Fidelity and they will sell me their ETFs at no cost. Albeit, the cost is small but money is money.
Moats and Income profile picture
Those are funny/true bullet points on MSFT, but fact remains they have a moat around Office/365/Azure...allows them to make big mistakes and keep on keeping on...;)
I-Know-Nothing profile picture
"Internet Explorer - which is used to download Chrome." - truth!
CompoundingDollaz profile picture
True dat, IKN!! I use IE to download Chrome all the time for my clients that need a browser that spies on you more than most.
BULLNOVA profile picture
Microsoft is all about the Cloud now. That is where their growth is.
Another good Reit with a 7% yield is MPW.
CompoundingDollaz profile picture
And the cloud and O365 are where the growth truly are. Should have ejected Ballmer the day before he became chief bozo in charge. Can you imagine where MSFT would be today without Ballmer's dozing of the mission and stock?
SleepyInSeattle profile picture
CompoundingDollaz profile picture
Love CWM's work, but buying REIT's over MSFT doesn't compute for me. My MSFT is up 45% while most of my REIT's are down 10% or larger and getting worse.

And the SurfaceBook is not a poor man's Chromebook. The Chromebook is a large screen YouTube console primarily. The SurfaceBook is actually a usable tablet with real horsepower. Yes, it's a lil quirky, but not a total failure like most other Microsoft hardware has been.
His point, I assume, is exactly that, A4I - take your MSFT gains (or some of them) while it's at a rich price and plow them into something at a cheap price - as in REITS.

Sounds logical, but that's as at as it goes. The advice to buy REITS at this point, even here at lower prices, but still yielding less than a T-Note (in the case of SCHH) would be hilarious were it not so dangerous. The rationale? Even more hilarious - because of wage growth.

Got news - no sooner that wage growth has kicked in, on paper, that employment conditions have actually weakened - long story, but take a deep dive in the DoL numbers - starting with a simple trending on employment figures that is weakening.

Further real rent growth ain't gonna happen in most classes - there is still too much capacity for doubling up and space sharing.
littlecubbie2019 profile picture
I am up way more in my msft like 150%. No way I’m going to sell this winner! I recently got a surface laptop and love it! I use edge as my browser as well.
so u don't want to sell something that is up 150%?? That's insane. that is exactly the time to sell it. it's common sense that people don't want to follow. does Microsoft have much more to rise? does a good company that is in an out of favor sector have more room to rise? yep.
Are you saying you prefer to own those 4 REITS in your investment portfolio rather than Microsoft or simply that you would buy those 4 now before you would buy Microsoft at current prices?
Maybe Microsoft can bring back the Zune and send multiples even higher. I like your picks and reasonings. Best of luck.

Logic in a volatile market is sage advice. Thanks.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

Related Stocks

SymbolLast Price% Chg
Apple Inc.
ARMOUR Residential REIT, Inc.
AvalonBay Communities, Inc.
CYS Investments, Inc.
Equity Residential

Related Analysis

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.