stock chart with pen and paper

Best REITs for Income

Looking for cash flow and income with Real Estate exposure without having to buy an office building or house?

REITs, or Real Estate Investment Trusts, are one way of gaining access to this without having to deal with tenants, rent collection, and other hassles that often come with the game. REIT’s are a go to place for dividends because they must pay out 90% of their taxable earnings as dividends to shareholders.

Today I’m giving you 9 REITS that I came up with. No, I did not fully investigate the company’s balance sheets, competitors, and things like that. What were my criteria?

  1. Dividend Growth
  2. History of increasing dividend
  3. History of NOT cutting the dividend
  4. A reasonable looking price action chart.

I originally made a much longer list, over 20 REITS; however, as I investigated those on the list, so many got AXED due to repeated dividend cuts or no growth.

Top REITS for Income

  • SPG-Simon Property Group
  • MPW-Medical Properties Trust
  • STOR-Store Capital
  • O-Realty Income
  • American Tower
  • Prologis
  • Extra Space Storage
  • Digital Realty Trust
  • Crown Castle

Now let’s look at their DIVIDEND GROWTH, DIVIDEND YIELD and other details such as RETURN ON EQUITY. Too many people only look at dividend yields; in an environment like today, you want a company who is GROWING their dividend. You also want a sign of good management, hence why I’m including Return on Equity down below. Disclaimer-there COULD be a company on this list that is suffering from a competitive view or has internal business problems; once again, I did not dive into that. My main consideration was yield and income. Hence, why further research is needed; these are simply IDEAS for you to look into.

Please keep in mind, with REITS the dividends are NOT qualified (I go over this here: What are Qualified Dividends


Simon Property Group

Simon Property Group is a REIT whose portfolio consists of shopping centers, restaurants, and entertainment buildings. They are exposed to the USA, Europe, and Asia.

  • DIVIDEND-6.18%
  • 1 yr Dividend growth 31%
  • 5 yr growth -.58%
  • ROE 68%

One thing to note here is the 5 year dividend growth, it’s negative. This is because SPG did indeed reduce their dividend during the pandemic. However, the ROE is looking fantastic and they just came off of a huge dividend increase! I do own SPG in my portfolio; however, I have reduced my holdings as of a few months ago (luckily at a profit) and it’s not a large position of mine. For the older crowd looking for consistent income, at a 6.2% dividend, SPG seems to fulfill the role.

Medical Properties Trust

Medical Properties Trust consists of net leased hospital buildings. They currently have 431 facilities in nine countries.

  • DIVIDEND-6.4%
  • 1 yr Dividend growth 3.6%
  • 5 yr growth 3.9%%
  • ROE 13.3%

MPW is one I used to own. I sold it around a year ago for a nice profit in my IRA account. Under $17, I’d consider buying again. I’m not pleased with the dividend growth; however, management seems to be doing a decent job and at a high enough yield, it would warrant the lack of growth. At a current yield of 6.4%, as an income generator it is looking good. Another thing to note is MPW didn’t cut its dividend during the pandemic. This company’s stock price hasn’t faired as well as it has in the past. There were a number of years it outperformed the market, now it’s seriously under performing.

Store Capital

Store Capital has 2500 properties across the US and is approved by Warren Buffett himself.

  • DIVIDEND- 5.91%
  • 1 yr Dividend growth 6.9%
  • 5 yr growth 5.8%
  • ROE 5.8%

STOR has pretty decent dividend growth; however, I would like to see better ROE numbers (double digits is best).

Realty Income

Realty Income has 6500 properties and is a Dividend Aristocrat

It is important to note, this company DID NOT cut its dividend during the pandemic.

  • DIVIDEND- 4.41%
  • 1 yr Dividend growth 5.11%
  • 5 yr growth 3%
  • ROE 2.4%

Realty Income is the poster child of dividend investors. Many people LOVE this stock because it pays a MONTHLY dividend. It certainly does have a great history. Dividend growth isn’t huge, but for this class it isn’t bad at 5% growth. Once again, I’m not digging the low ROE.

American Tower

American Tower is a Communications REIT with 219K communications sites

  • DIVIDEND- 2.43%
  • 1 yr Dividend growth 15.3%
  • 5 yr growth 18.2%
  • ROE 49%

This REIT looks very strong looking at the numbers. A big consistent dividend growth and huge ROE. I don’t own this one individually; however, it is a top 10 holding of my Vanguard Real Estate mutual fund. If you are only looking for income and yield, this isn’t one of the better ones. However, from a TOTAL RETURN perspective, this could be quite promising over the next few years.

Prologis

Prologis consists of logistics facilities in 19 countries and 5500 customers

  • DIVIDEND- 2.64%
  • 1 yr Dividend growth 25.40%
  • 5 yr growth 12.42%
  • ROE 11.3%

Prologis looks like another one to investigate further given the consistent dividend growth and decent ROE. Once again, this is a top holding in my Vanguard Real Estate Mutual Fund. I’m not sure the reason; however, Prologis recently had a HUGE price drop. Perhaps that’s a reasonable reaction, maybe not. Check it out!

Extra Space Storage

1906 Storage stores in 40 states. They also do things like RV storage; all based in the United States. So, with this one, you aren’t getting international diversification.

  • DIVIDEND- 2.95%
  • 1 yr Dividend growth 50%
  • 5 yr growth 14%
  • ROE 27%

Not trying to influence anyone here; however, this one is looking pretty good considering that hefty dividend growth and ROE. I put this on my watch list about two years ago and never bought it.

Digital Realty Trust

DRT is a portfolio of DATA CENTERS; almost 300 facilities in 23 countries. So there is plenty of international diversification here.

  • DIVIDEND- 3.82%
  • 1 yr Dividend growth 5.2%
  • 5 yr growth 5.6%
  • ROE 8%

A little bit of dividend growth and a fairly average ROE. This isn’t in my top three list, but it also doesn’t look bad if you want international REIT exposure in a different sector. At a yield of 3.82%, it isn’t a high yielder, but it’s not at the bottom of the list either.

Crown Castle

Their portfolio is made up of cell towers and fiber structures. Over 40K cell towers and almost 100K miles of fiber infrastructure.

  • DIVIDEND- 3.30%
  • 1 yr Dividend growth 10.53%
  • 5 yr growth 9.12%
  • ROE 17.4%

Crown Castle looks good looking at only the numbers. A decent amount of dividend growth and a good ROE.

SUMMARY

I hope this list has given you some IDEAS to consider. Once again, do your own research. When considering any stock, I will look over balance sheets, competitive advantages, macro-economic considerations. So, yeah, do all of that.

Another good option is to do like I have done in my ROTH IRA, buy a REIT ETF or MUTUAL FUND. There are lots of those available. Maybe I’ll do a posting on those soon.

Looking for more DIVIDEND INCOME ideas? Be sure to check out my blog on the best blue chip dividend stocks here:

Blue Chip Dividend Stocks

4 thoughts on “Best REITs for Income”

  1. Pingback: 9 of the best Blue Chip Dividend Stocks - Ripe for Investing

  2. Pingback: What is a Closed End Fund? - Ripe for Investing

  3. Pingback: Is dividend Investing worth it? - Ripe for Investing

  4. Pingback: Qualified Dividends - Ripe for Investing

Leave a Comment

Your email address will not be published.