Dividend Yields To Rule a Little Longer

chart01After preparing the financial markets for a potential interest rate hike in the middle of this month, Federal Reserve’s head Janet Yellen, elected by Forbes the third most powerful woman, decided to be on hold until the economic outlook clears. This Monday’s surprise announcement ignited a new wave of celebrations among dividend and emerging markets investors.

Yellen’s announcement came following the news that employers added a mere 38 thousand jobs in May. The figure was so low that she remained cautious and preferred to wait for more data. Remember that a couple of weeks ago she said an increase would be appropriate. As a result, some financial outlets say that this announcement effectively postpone a potential hike to September, opening a window of opportunity for speculative capital chasing certain types of stocks.

Until yesterday I was 100% confident that it was not worth considering emerging markets investments, such as the one I bumped into, Tierra XP Latin America Real Estate ETF, a new real estate ETF focused on Latin America (click here). Although their real estate investment trusts and real estate operating companies, especially in Brazil, have been underestimated, currency trend has been in favor of U.S. dollars. Currency exchange fluctuations caused by higher interest rates would likely trump any gains in the local currency. The announcement might interrupt the trend for now and favors gains in the short term, but it should resume in the long term.

Dividend stocks, including REITs, should also benefit from the announcement. Rather than interest rates, dividend yields will rule for a little longer, especially when equity REIT yields are on average 4.1%, as opposed to a 10-year treasury bond rate under 2%. This reminds me of what William Koldus said in a recent article. Back in 2009, he couldn’t imagine the current scenario of low interest rates (click here). This is what he said:

“In 2009, it was hard for me to imagine a robust recovery in the financial markets that extended for seven years, while economic growth struggled. It was hard to imagine seven years of zero interest rates, which would entice investors to keep reaching for income. After going through this low interest rate period, today, it is hard for investors to imagine a future that looks different from the current environment, as I could not do in 2009.”

Well, it appears that we’ll have more of the same. With this degree of uncertainty about the future, the status quo seems more likely.

Source: Tierra XP Latin America Real Estate ETF (NYSEArca:LARE), Seeking Alpha, Bloomberg

Disclaimer: This newsletter is not engaged in rendering tax, accounting, or other professional advice through this publication. No statement in this issue is to be construed as a recommendation to buy or sell any security or other investment. Please do your own due diligence before making any investment decision. Some information presented in this publication has been obtained from third-party sources considered to be reliable. Sources are not required to make representations as to the accuracy of the information, however, and consequently the publisher cannot guarantee accuracy.

Disclosure: The author has no positions in any shares mentioned, and no plans to initiate any positions within the next 72 hours.

U.S. Equity REITs: Step Away Completely?

packs-163497_1280.jpgThe 2016 financial market is certain to continue to be plagued by volatility. Due to poor prospects in the world economy, particularly in China and other emerging markets, most investors seem to be overwhelmed. I’m not saying that a strong deceleration in China is certain to bring developed economies down with it, but it may act as a catalyst for a substantial change in perception. I was interested to learn that a week ago the Royal Bank of Scotland (RBS) strongly encouraged clients to step away from the equity markets completely and suggested that they invest in high quality bonds.

There’s no denying that 2015 was volatile, largely due to investors being overwhelmed by managing both potential domestic and overseas risks. When the Fed threatened to raise interest rates, the market would sell off. In fact, the number of sell off attempts was so high that day that the Fed had no choice but to announce the interest rate hike was a nonevent day. With the Feds clearing the path, investors have shifted their focus overseas, primarily on China.

Due to equity REIT stocks appearing to correlate with the financial market’s ups and downs, REIT share prices have been significantly impacted. Apart from lodging REITs, I can’t recall a time in 2015 when a selloff in equity REITs wasn’t associated with a major selloff in the market. What had been a major benefit of REITs (not to be compared with S&P 500) appears to no longer be the case (at least for the moment). It could be said that the ascension of REITs to mainstream has resulted in the asset class becoming more vulnerable to market swings.

There are several ways to handle this situation. The first option is to follow RBS’s advice and get out of the equity market. In this case, there will be no changes to your investments, either negatively or positively. Some people would say it’s important to hold on to cash, something I would do if I knew the world was falling apart. This may be the case when fundamentals are deteriorating and growth prospects are decreasing. People may disagree on the pacing, but the U.S. economy continues to grow to the point that I would shocked if it fell into a recession in 2016.

The second option is to take the bull by the horns and try to determine what has and has not been working for equity REITs. This is frustrating because REITs, as operational companies, have performed well.

Investing in REITs in aggregate as an asset class simply didn’t work in 2015, something I attribute to their bad reputation during interest rate hikes. Although some authors have extensively proven that REITs aren’t destined to tank during periods of interest rate hikes, the market still assumes this is the general rule. Throughout 2015, I constantly read over the financial websites that called for abandoning dividend stocks, including REITs. I don’t see this changing in 2016, which is why I would not invest in broad REITs indexes or ETFs in 2016.

On the other hand, sectors whose fundamentals remained resilient and have promoted strong growth rates, such as apartments, data centers, and self-storage, went through 2015 with positive returns. In addition, free standing retail, which includes net lease companies, also had good share price performance. In 2015, picking sectors was a smart move. In 2016, this should continue to be the case.

Disclaimer: This newsletter is not engaged in rendering tax, accounting, or other professional advice through this publication. No statement in this issue is to be construed as a recommendation to buy or sell any security or other investment. Please do your own due diligence before making any investment decision. Some information presented in this publication has been obtained from third-party sources considered to be reliable. Sources are not required to make representations as to the accuracy of the information, however, and consequently the publisher cannot guarantee accuracy.

Disclosure: The author has no positions in any shares mentioned, and no plans to initiate any positions within the next 72 hours.

#FedDecision – We Finally Took Off

chart01History will certainly remember this date for years to come. After much speculation, the Federal Reserve has decided to raise short-term interest rates. The target range rose from 0-0.25 percent to 0.25-0.50 percent. We finally took off.

chart02Earlier this month Janet Yellen had provided clear indications that the Fed was ready to take the first step. In fact, her speech at the Economic Club of Washington on December 2, 2015 paved the way for the increase.

The market received the message, and yesterday was calm. The VIX, which measures the volatility of the S&P 500, peaked last Friday; however, it has since decreased. Not to worry, it was nothing like the late August 2015 figures.

chart04So what comes next? The question will shift from ‘when’ the Fed starts increasing rates to ‘how much and how fast’ the hikes occur. It is unlikely that we will see rate increases at consecutive meetings; however, some experts predict that the Fed could raise rates 3-4 times in 2016.

Yellen appears content with the employment figures despite the decrease in labor participation rate. On the other hand, she has emphasized several times that inflation has been below the two percent target. Both the drop in oil prices and appreciation of the dollar has contained inflationary forces. Nonetheless, Yellen appears confident that these drivers are transitory, and prices will begin to rise towards the target during the year of 2016.

chart03The following is a list of items that we may be expecting from the Fed.

  • They will keep a slow and incremental pace for additional rate hikes.
  • Most recently hikes lasted for approximately a year, with the exception of 2004-2006, which lasted for two years. Expect this to last even longer.
  • If the Fed’s were to target the average 3-4 percent interest rate, rising in increments of 0.25 percent four times a year, it would take approximately three years to reach the goal. The last hikes did surpass the five percent mark.
  • A major international or nation hiccup may halt the hike.
  • The hike may be stalled by a softer than expected inflation rate in 2016.
  • REIT stocks may still perform well, regardless of the increase. The MSCI US REIT Index (NYSE:^RMZ) performed positively during the 2004-2006 hike.

chart05

Some excerpts from the press release:

“The Committee currently expects that, with gradual adjustments in the stance of monetary policy, economic activity will continue to expand at a moderate pace and labor market indicators will continue to strengthen.”

“The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.”

“In light of the current shortfall of inflation from 2 percent, the Committee will carefully monitor actual and expected progress toward its inflation goal.”

Source: Federal Reserve

Disclaimer: This newsletter is not engaged in rendering tax, accounting, or other professional advice through this publication. No statement in this issue is to be construed as a recommendation to buy or sell any security or other investment. Please do your own due diligence before making any investment decision. Some information presented in this publication has been obtained from third-party sources considered to be reliable. Sources are not required to make representations as to the accuracy of the information, however, and consequently the publisher cannot guarantee accuracy.

Disclosure: The author has no positions in any shares mentioned, and no plans to initiate any positions within the next 72 hours.

When the fundamentals aren’t being discussed

Release Date: 04 April 2015 (Extra Edition)

Last week, I posted a ranking of the US top-yield equity REITs. NorthStar Realty Finance Corp (NYSE: NRF) topped the list, sporting an 8.8 percent dividend yield. This week the stock is up slightly (0.7 percent), but the dividend yield continues to be attractive. As such, the stock is worth exploring in a little more detail. However, a look at NorthStar’s recent press releases shows that property fundamentals have not been the main point of discussion.

Background

NorthStar Realty is a Maryland-based diversified portfolio REIT in the commercial real estate realm, allocated largely in the health care and hotel sectors (65 percent of the 31 December 2014 portfolio). Its European assets will likely be spun out into a new NYSE publicly-traded company called NorthStar Realty Europe (NRE) by the second half of 2015. Over the past five weeks, NorthStar has raised US$ 353 million in common equity to buy properties in Europe, including the recently-closed acquisition of a €1.1 billion pan-European office portfolio.

Although it went public in October of 2004 as a mortgage REIT, NorthStar recently flipped into an equity REIT. It still has a debt component, but this is a minor portion of the portfolio (6.6 percent of its portfolio).

This past June NorthStar segregated its management off into NorthStar Asset Management Group Inc. (NYSE: NSAM), and since then both companies have been trading separately. NSAM acts as a brokerage firm for four non-traded REITs.

“Tension” between traded and non-traded

Conflict of interest has been the “elephant in the room” for this REIT. NSAM manages several funds, and there are questions about how management will deal with competing interests between different funds’ shareholders.

For instance, one question is whether NSAM will be able to fairly oversee both a traded fund (NRF) and non-traded funds, which have different asset management fee levels (management, acquisition, disposition and incentive fees). Remember that NSAM manages a pipeline of potential acquisitions and so must choose which fund gets to pick the best deals. This concern was also raised when the company decided to use NRF’s common equity offering proceeds to promote NorthStar Realty Europe’s growth and consequently spin it off. Although management argues that the spin-off unlocks value (as they discussed in their 6 March 2015 presentation, “Immediate value to NRF”), it still isn’t clear what’s in it for NRF.

This is a cloud hanging over NRF that could potentially harm stock performance in the long run. In my experience, concerns over conflict of interest have always driven share prices to discount territory that never realizes full value.

European arm

NorthStar’s European assets are valued at approximately $2.0 billion, and the real estate portfolio is comprised of 50 properties with five million square feet in prime locations, mainly in the United Kingdom, Germany, and France.

There are a number of positive points for NorthStar Realty Europe as part of an investment strategy. European real estate valuations haven’t recovered since the Great Recession. Cap rates relative to long-term interest rates have reached an all-time high. Upside on property value as appreciation of European REITs has historically signaled future appreciation of properties. And, of course, property diversification by country and type is almost always a valuable strategy.

Short interest spike

This March, short interest in NorthStar Realty rose more than 1,000 percent to 57,093,856 shares. About 19.2 percent of the company’s shares are now short.

Takeaway

Recent news associated with changes in management arrangements and the European spin-off has put NRF’s fundamentals on the back burner. I’m hoping that NSAM will refocus its energies on what matters. By the way, NorthStar is one of the few REITs (perhaps the only one) that does not disclose the operational metrics AFFO/FFO in its 10-K report.

Source: NorthStar Realty website, WSJ


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Written by Heli Brecailo

Disclaimer This newsletter is not engaged in rendering tax, accounting, or other professional advice through this publication. No statement in this issue is to be construed as a recommendation to buy or sell any security or other investment. Please do your own due diligence before making any investment decision. Some information presented in this publication has been obtained from third-party sources considered to be reliable. Sources are not required to make representations as to the accuracy of the information, however, and consequently the publisher cannot guarantee accuracy. Disclosure The author has no positions in any shares mentioned, and no plans to initiate any positions within the next 72 hours.​

U.S. – Top Yield Equity REITs by Sector

Reference Date: 27 March 2015

Total 159 REITs Ranked by Dividend Yield

Sec # – Ranking within property sector

Gen # – Ranking within all equity REITs


Property Sector: Diversified

Sector’s Median Price-to-FFO: 17.2

Sector’s Median Dividend Yield: 5.2

Sec # Gen # Company Ticker Share Price Q4 14 FFO Annual Dividend Price-to-FFO Div. Yield
1 1 NorthStar Realty Finance Corp. NRF 18.09 0.44* 1.60 10.3* 8.8
2 4 Select Income REIT SIR 25.00 0.63 1.92 9.9 7.7
3 9 Whitestone REIT WSR 16.04 0.22 1.14 18.2 7.1
4 11 Investors Real Estate Trust IRET 7.47 0.17 0.52 11.0 7.0
5 12 Lexington Realty Trust LXP 9.85 0.25 0.68 9.9 6.9
6 15 One Liberty Properties, Inc. OLP 24.45 0.33 1.56 18.5 6.4
7 16 Armada Hoffler Properties, Inc. AHH 10.75 0.20 0.68 13.4 6.3
8 17 EPR Properties EPR 59.41 1.10 3.63 13.5 6.1
9 21 Gaming and Leisure Properties, Inc. WI GLPI 36.95 0.57 2.18 16.2 5.9
10 24 GEO Group Inc GEO 43.78 0.70 2.48 15.6 5.7
11 25 W.P. Carey Inc. WPC 67.48 0.99 3.81 17.0 5.6
12 35 Corrections Corporation of America CXW 41.09 0.67 2.16 15.3 5.3
13 37 DuPont Fabros Technology, Inc. DFT 32.36 0.58 1.68 13.9 5.2
14 38 Iron Mountain, Inc. IRM 36.64 0.28 1.90 32.7 5.2
15 39 Digital Realty Trust, Inc. DLR 65.73 1.40 3.40 11.7 5.2
16 48 Lamar Advertising Company Class A LAMR 58.73 1.43 2.72 10.3 4.6
17 51 OUTFRONT Media Inc. OUT 30.09 0.57 1.36 13.2 4.5
18 59 Washington Real Estate Investment Trust WRE 27.45 0.40 1.20 17.2 4.4
19 78 CyrusOne, Inc. CONE 31.64 0.27 1.26 29.3 4.0
20 100 Gladstone Land Corp. LAND 11.98 0.09 0.42 31.9 3.5
21 102 QTS Realty Trust, Inc. Class A QTS 37.15 0.54 1.28 17.2 3.4
22 103 CoreSite Realty Corporation COR 48.84 0.61 1.68 20.0 3.4
23 115 Alexander’s, Inc. ALX 450.19 4.99 14.00 22.6 3.1
24 132 Gramercy Property Trust Inc. GPT 28.55 0.20 0.80 35.7 2.8
25 145 Vornado Realty Trust VNO 110.94 1.22 2.52 22.7 2.3
26 146 Silver Bay Realty Trust Corp. SBY 16.02 0.12 0.36 33.4 2.2
27 147 Starwood Waypoint Residential Trust SWAY 25.49 0.27 0.56 23.6 2.2
28 148 American Assets Trust, Inc. AAT 43.06 0.42 0.93 25.6 2.2
29 157 American Homes 4 Rent Class A AMH 16.29 0.11 0.20 37.0 1.2

*CAD


Property Sector: Health Care

Sector’s Median Price-to-FFO: 17.8

Sector’s Median Dividend Yield: 4.7

Sec # Gen # Company Ticker Share Price Q4 14 FFO Annual Dividend Price-to-FFO Div. Yield
1 10 Senior Housing Properties Trust SNH 22.36 0.48 1.56 11.6 7.0
2 20 Medical Properties Trust, Inc. MPW 14.84 0.15 0.88 24.7 5.9
3 27 New Senior Investment Group Inc SNR 16.69 0.23 0.92 18.1 5.5
4 30 Omega Healthcare Investors, Inc. OHI 40.21 0.68 2.16 14.8 5.4
5 31 HCP, Inc. HCP 42.15 0.70 2.26 15.1 5.4
6 40 Physicians Realty Trust DOC 17.46 0.19 0.90 23.0 5.2
7 44 National Health Investors, Inc. NHI 70.50 1.07 3.40 16.5 4.8
8 45 Sabra Health Care REIT, Inc. SBRA 32.73 0.54 1.56 15.2 4.8
9 46 CareTrust REIT Inc CTRE 13.68 0.24 0.64 14.3 4.7
10 49 Universal Health Realty Income Trust UHT 55.23 0.73 2.54 18.9 4.6
11 52 LTC Properties, Inc. LTC 45.14 0.64 2.04 17.6 4.5
12 58 Healthcare Realty Trust Incorporated HR 27.40 0.38 1.20 18.0 4.4
13 68 Health Care REIT, Inc. HCN 77.78 0.86 3.30 22.6 4.2
14 69 Healthcare Trust of America, Inc. Class A HTA 27.58 0.33 1.16 20.9 4.2
15 77 Aviv REIT, Inc. AVIV 36.10 0.42 1.44 21.5 4.0
16 112 Ventas, Inc. VTR 72.32 1.16 3.16 15.6 4.4*

*updated after posting.


Property Sector: Infrastructure

Sector’s Median Price-to-FFO: 21.5

Sector’s Median Dividend Yield: 3.9

Sec # Gen # Company Ticker Share Price Q4 14 FFO Annual Dividend Price-to-FFO Div. Yield
1 6 CorEnergy Infrastructure Trust, Inc. CORR 6.89 0.08 0.52 21.5 7.5
2 83 Crown Castle International Corp CCI 84.81 1.17 3.28 18.1 3.9
3 154 American Tower Corporation AMT 96.04 1.00 1.68 24.0 1.7

Property Sector: Lodging/Resorts

Sector’s Median Price-to-FFO: 16.2

Sector’s Median Dividend Yield: 3.9

Sec # Gen # Company Ticker Share Price Q4 14 FFO Annual Dividend Price-to-FFO Div. Yield
1 18 Hospitality Properties Trust HPT 32.58 0.87 1.96 9.4 6.0
2 42 Ashford Hospitality Trust, Inc. AHT 9.63 0.21 0.48 11.5 5.0
3 60 Hersha Hospitality Trust Class A HT 6.47 0.12 0.28 13.5 4.3
4 65 RLJ Lodging Trust RLJ 30.63 0.53 1.32 14.4 4.3
5 66 Ryman Hospitality Properties, Inc. RHP 60.85 1.76 2.60 8.6 4.3
6 71 Chesapeake Lodging Trust CHSP 33.70 0.38 1.40 22.2 4.2
7 72 Chatham Lodging Trust CLDT 28.95 0.23 1.20 31.5 4.1
8 76 Host Hotels & Resorts, Inc. HST 20.04 0.40 0.80 12.5 4.0
9 80 LaSalle Hotel Properties LHO 38.51 0.58 1.50 16.6 3.9
10 92 Sotherly Hotels Inc. SOHO 7.54 0.18 0.28 10.5 3.7
11 98 DiamondRock Hospitality Company DRH 13.99 0.19 0.50 18.4 3.6
12 105 Summit Hotel Properties, Inc., INN 13.83 0.19 0.47 18.2 3.4
13 136 Pebblebrook Hotel Trust PEB 45.69 0.43 1.24 26.6 2.7
14 156 FelCor Lodging Trust Incorporated FCH 11.37 0.11 0.16 25.8 1.4
15 158 Sunstone Hotel Investors, Inc. SHO 16.42 0.26 0.20 15.8 1.2
16 159 Ashford Hospitality Prime, Inc. AHP 16.70 0.21 0.20 19.9 1.2

Property Sector: Industrial/Office

Sector’s Median Price-to-FFO: 16.3

Sector’s Median Dividend Yield: 3.8

Sec # Gen # Company Ticker Share Price Q4 14 FFO Annual Dividend Price-to-FFO Div. Yield
1 2 Gladstone Commercial Corporation GOOD 18.46 0.65 1.50 7.1 8.1
2 5 Government Properties Income Trust GOV 22.70 0.56 1.72 10.1 7.6
3 7 City Office REIT, Inc. CIO 12.76 0.18 0.94 17.7 7.4
4 13 Chambers Street Properties CSG 7.85 0.14 0.51 14.0 6.5
5 19 Franklin Street Properties Corp. FSP 12.71 0.27 0.76 11.8 6.0
6 23 STAG Industrial, Inc. STAG 23.54 0.34 1.35 17.3 5.7
7 28 Monmouth Real Estate Investment Corporation Class A MNR 11.04 0.14 0.60 19.7 5.4
8 34 Liberty Property Trust LPT 35.97 0.67 1.90 13.4 5.3
9 41 First Potomac Realty Trust FPO 11.89 0.27 0.60 11.0 5.0
10 47 BioMed Realty Trust, Inc. BMR 22.35 0.35 1.04 16.0 4.7
11 50 Piedmont Office Realty Trust, Inc. Class A PDM 18.46 0.40 0.84 11.5 4.6
12 53 New York REIT, Inc. NYRT 10.26 0.23 0.46 11.2 4.5
13 54 Columbia Property Trust, Inc. CXP 26.88 0.49 1.20 13.7 4.5
14 62 Parkway Properties, Inc. PKY 17.37 0.31 0.75 14.0 4.3
15 84 EastGroup Properties, Inc. EGP 59.32 0.91 2.28 16.3 3.8
16 85 Corporate Office Properties Trust OFC 28.75 0.34 1.10 21.1 3.8
17 86 Brandywine Realty Trust BDN 15.89 0.30 0.60 13.2 3.8
18 90 Highwoods Properties, Inc. HIW 45.33 0.74 1.70 15.3 3.8
19 106 Prologis, Inc. PLD 43.04 0.52 1.44 20.7 3.3
20 109 DCT Industrial Trust Inc. DCT 34.46 0.46 1.12 18.7 3.3
21 113 Mack-Cali Realty Corporation CLI 19.11 0.34 0.60 14.1 3.1
22 114 Duke Realty Corporation DRE 21.70 0.20 0.68 27.1 3.1
23 116 Rexford Industrial Realty, Inc. REXR 15.60 0.19 0.48 20.5 3.1
24 117 Alexandria Real Estate Equities, Inc. ARE 97.40 0.86 2.96 28.3 3.0
27 120 Cousins Properties Incorporated CUZ 10.63 0.24 0.32 11.1 3.0
25 125 Terreno Realty Corporation TRNO 22.32 0.20 0.64 27.9 2.9
26 126 Douglas Emmett, Inc DEI 29.35 0.39 0.84 18.8 2.9
28 141 First Industrial Realty Trust, Inc. FR 20.86 0.32 0.51 16.3 2.4
29 142 PS Business Parks, Inc. PSB 82.16 2.17 2.00 9.5 2.4
30 149 Paramount Group, Inc. PGRE 19.14 0.39 0.38 12.3 2.0
31 150 SL Green Realty Corp. SLG 127.74 1.43 2.40 22.3 1.9
32 151 Boston Properties, Inc. BXP 139.81 1.26 2.60 27.7 1.9
33 152 Kilroy Realty Corporation KRC 75.48 0.78 1.40 24.2 1.9
34 153 Empire State Realty Trust, Inc. Class A ESRT 18.75 0.22 0.34 21.3 1.8
35 155 Hudson Pacific Properties, Inc. HPP 32.30 0.24 0.50 33.6 1.5

Property Sector: Retail

Sector’s Median Price-to-FFO: 18.8

Sector’s Median Dividend Yield: 3.8

Sec # Gen # Company Ticker Share Price Q4 14 FFO Annual Dividend Price-to-FFO Div. Yield
1 22 Spirit Realty Capital, Inc. SRC 11.84 0.20 0.68 14.8 5.7
2 26 Agree Realty Corporation ADC 32.60 0.57 1.80 14.3 5.5
3 29 CBL & Associates Properties, Inc. CBL 19.53 0.82 1.06 6.0 5.4
4 32 Inland Real Estate Corporation IRC 10.65 0.25 0.57 10.7 5.4
5 36 Excel Trust, Inc EXL 13.86 0.15 0.72 23.1 5.2
6 43 Getty Realty Corp. GTY 18.16 0.38 0.88 11.9 4.8
7 55 Realty Income Corporation O 51.06 0.64 2.27 19.9 4.5
8 56 Urstadt Biddle Properties Inc. Class A UBA 22.93 0.24 1.02 23.9 4.4
9 63 STORE Capital Corporation STOR 23.18 0.32 1.00 18.1 4.3
10 64 Ramco-Gershenson Properties Trust RPT 18.55 0.05 0.80 92.8 4.3
11 67 Retail Properties of America, Inc. Class A RPAI 15.61 0.26 0.66 15.0 4.2
12 70 National Retail Properties, Inc. NNN 40.42 0.56 1.68 18.0 4.2
13 81 Kite Realty Group Trust KRG 28.10 0.50 1.09 14.1 3.9
14 82 Weingarten Realty Investors WRI 35.59 0.51 1.38 17.4 3.9
15 87 Retail Opportunity Investments Corp. ROIC 18.03 0.21 0.68 21.5 3.8
16 88 Rouse Properties, Inc. RSE 19.10 0.36 0.72 13.3 3.8
17 91 DDR Corp. DDR 18.47 0.22 0.69 21.0 3.7
18 94 Pennsylvania Real Estate Investment Trust PEI 23.11 0.59 0.84 9.8 3.6
19 95 Kimco Realty Corporation KIM 26.52 0.38 0.96 17.4 3.6
20 101 Brixmor Property Group, Inc. BRX 26.12 0.43 0.90 15.2 3.4
21 107 Equity One, Inc. EQY 26.51 0.25 0.88 26.5 3.3
22 118 Saul Centers, Inc. BFS 56.70 0.62 1.72 22.9 3.0
23 119 Macerich Company MAC 86.15 0.99 2.60 21.8 3.0
24 121 Taubman Centers, Inc. TCO 76.75 0.54 2.26 35.5 2.9
25 122 Simon Property Group, Inc. SPG 194.26 2.47 5.60 19.7 2.9
26 123 Regency Centers Corporation REG 67.46 0.78 1.94 21.6 2.9
27 133 Acadia Realty Trust AKR 34.38 0.30 0.96 28.7 2.8
28 134 Tanger Factory Outlet Centers, Inc. SKT 35.10 0.40 0.96 21.9 2.7
29 137 Cedar Realty Trust, Inc. CDR 7.43 0.12 0.20 15.5 2.7
30 139 WP GLIMCHER, Inc WPG 16.59 0.46 0.44 9.0 2.7
31 143 Federal Realty Investment Trust FRT 145.66 1.13 3.48 32.2 2.4
32 144 General Growth Properties, Inc. GGP 29.55 0.38 0.68 19.4 2.3

Property Sector: Residential

Sector’s Median Price-to-FFO: 19.4

Sector’s Median Dividend Yield: 3.6

Sec # Gen # Company Ticker Share Price Q4 14 FFO Annual Dividend Price-to-FFO Div. Yield
1 3 Independence Realty Trust, Inc. IRT 9.31 0.14 0.72 16.6 7.7
2 8 UMH Properties, Inc. UMH 10.00 0.16 0.72 15.6 7.2
3 14 Preferred Apartment Communities, Inc. APTS 10.88 0.25 0.70 10.9 6.4
4 33 Trade Street Residential, Inc. TSRE 7.13 0.05 0.38 35.7 5.3
5 57 Home Properties, Inc. HME 68.92 1.16 3.04 14.9 4.4
6 73 Education Realty Trust, Inc. EDR 35.00 0.52 1.44 16.8 4.1
7 75 Mid-America Apartment Communities, Inc. MAA 76.73 1.35 3.08 14.2 4.0
8 79 Sun Communities, Inc. SUI 66.30 0.50 2.60 33.2 3.9
9 96 Camden Property Trust CPT 77.48 0.99 2.80 19.6 3.6
10 97 American Campus Communities, Inc. ACC 42.08 0.73 1.52 14.4 3.6
11 104 Associated Estates Realty Corporation AEC 24.62 0.33 0.84 18.7 3.4
12 108 UDR, Inc. UDR 33.91 0.40 1.11 21.2 3.3
13 110 Monogram Residential Trust Inc MORE 9.31 0.06 0.30 38.8 3.2
14 124 AvalonBay Communities, Inc. AVB 174.12 1.76 5.00 24.7 2.9
15 127 Apartment Investment and Management Company Class A AIV 39.38 0.54 1.12 18.2 2.8
16 129 Post Properties, Inc. PPS 56.56 0.73 1.60 19.4 2.8
17 130 Equity Residential EQR 78.45 0.87 2.21 22.5 2.8
18 135 Equity LifeStyle Properties, Inc. ELS 55.11 0.66 1.50 20.9 2.7
19 140 Essex Property Trust, Inc. ESS 232.37 2.29 5.76 25.4 2.5

Property Sector: Timber

Sector’s Median Price-to-Earnings: 27.8

Sector’s Median Dividend Yield: 3.8

Sec # Gen # Company Ticker Share Price Q4 14 Earnings Annual Dividend Price-to-Earnings Div. Yield
1 61 CatchMark Timber Trust, Inc. Class A CTT 11.57 0.05 0.50 57.9 4.3
2 74 Plum Creek Timber Company, Inc. PCL 43.42 0.39 1.76 27.8 4.1
3 89 Potlatch Corporation PCH 39.82 0.49 1.50 20.3 3.8
4 93 Rayonier Inc. RYN 27.00 0.07 1.00 96.4 3.7
5 99 Weyerhaeuser Company WY 33.05 0.31 1.16 26.7 3.5

Property Sector: Self-Storage

Sector’s Median Price-to-FFO: 22.8

Sector’s Median Dividend Yield: 2.8

Sec # Gen # Company Ticker Share Price Q4 14 FFO Annual Dividend Price-to-FFO Div. Yield
1 111 Sovran Self Storage SSS 93.52 1.08 3.00 21.6 3.2
2 128 Public Storage PSA 197.48 2.17 5.60 22.8 2.8
3 131 Extra Space Storage EXR 66.98 0.62 1.88 27.0 2.8
4 138 CubeSmart CUBE 23.80 0.26 0.64 22.9 2.7

Notes from the author

This is not a recommendation to buy or sell stocks. The highest-yielding stocks are not necessarily the best choice for your portfolio. The purpose of this ranking is to shorten your stock analysis by enabling comparison of stock and sector performance. This is a snapshot of information available on 27 March 2015. Please perform your own due diligence before acting.

The equity REITs are constituent companies of the FTSE NAREIT All REITs Index as of 28 February 2015.

Companies whose equity market capitalization is lower than $100 million have been disregarded.

The following companies have been disregarded due to no dividend distribution, lack of FFO data, or negative FFO:

Company
American Realty Capital Properties, Inc. Class A ARCP
Bluerock Residential Growth REIT, Inc. Class A BRG
Xenia Hotels & Resorts, Inc. XHR
Urban Edge Properties UE
InfraREIT, Inc. HIFR
Winthrop Realty Trust FUR
Easterly Government Properties, Inc. DEA
Strategic Hotels & Resorts, Inc. BEE
Equity Commonwealth EQC
American Residential Properties, Inc. ARPI
Equinix, Inc. EQIX
Campus Crest Communities, Inc. CCG

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Written by Heli Brecailo

Disclaimer This newsletter is not engaged in rendering tax, accounting, or other professional advice through this publication. No statement in this issue is to be construed as a recommendation to buy or sell any security or other investment. Please do your own due diligence before making any investment decision. Some information presented in this publication has been obtained from third-party sources considered to be reliable. Sources are not required to make representations as to the accuracy of the information, however, and consequently the publisher cannot guarantee accuracy. Disclosure The author has no positions in any shares mentioned, and no plans to initiate any positions within the next 72 hours.​