3 REITs With High and Safe Yields up to 9.3% to Buy Now
By Joseph Solitro - March 4, 2016
If you’re interested in real estate investment trusts for the monthly income they offer, but you can’t figure out which one to buy today, then this article will make things much easier for you. I’ve searched the industry and selected three great options with high and safe yields of 4-10%, so let’s take a closer look at each to determine which would be the best fit for your portfolio.
1. Cominar Real Estate Investment Trust
Cominar Real Estate Investment Trust (TSX:CUF.UN) is the third-largest diversified REIT in Canada and the largest commercial property owner in Quebec with 566 office, retail, industrial, and mixed-use properties that total approximately 45.4 million square feet. It pays a monthly distribution of $0.1225 per share, or $1.47 per share annually, which gives its stock a yield of about 9.3% at today’s levels.
Investors must also make two notes.
First, Cominar has raised its annual distribution for two consecutive years.
Second, I think its current distribution rate is safe, but I think its reduced amount of recurring distributable income, including a 3.6% year-over-year decline to $1.60 per share in fiscal 2015, may cause it to simply maintain this rate in 2016, which would end its streak of annual increases.
2. Artis Real Estate Investment Trust
Artis Real Estate Investment Trust (TSX:AX.UN) is one of the largest owners and operators of commercial real estate in Canada and the United States with 255 office, industrial, and retail properties that total approximately 26.2 million square feet. It pays a monthly distribution of $0.09 per share, or $1.08 per share annually, which gives its stock a yield of about 8.8% at today’s levels.
Investors should also note that Artis has maintained its current annual distribution rate since 2009. However, I think its increased amount of funds from operations, including its 5.7% year-over-year growth to an adjusted $1.30 per share in fiscal 2015, and its reduced payout ratio, including 83.1% in fiscal 2015 compared with 87.8% in fiscal 2014, could allow it to announce a distribution hike in the very near future.
3. Canadian REIT
Canadian REIT (TSX:REF.UN) owns one of the largest diversified real estate portfolios in Canada with 197 industrial, retail, and office properties that total approximately 32.8 million square feet. It pays a monthly distribution of $0.15 per share, or $1.80 per share annually, which gives its stock a yield of about 4.6% at today’s levels.
Investors must also make two notes.
First, Canadian REIT has raised its annual distribution for 14 consecutive years, which gives it the longest active streak for a public REIT in Canada, and its 2.9% hike in June 2015 has it on pace for 2016 to mark the 15th consecutive year with an increase.
Second, I think its ample funds from operations, including its adjusted $2.42 per share in fiscal 2015, and its low payout ratio, including an adjusted 73.5% in fiscal 2015, could allow it to announce another dividend hike within the next few months.
Should you buy one of these REITs today?
Cominar REIT, Artis REIT, and Canadian REIT are three of the most attractive investment options in the real estate industry, so Foolish investors should strongly consider initiating positions in one of them today.