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SuperDividend REIT ETF: An 8.4% Yield That's Probably Not Sustainable

Published Fri, 20 Jul 2018 14:07:48 -0400 on Seeking Alpha

Main Thesis In this article, we will take a look at the SuperDividend REIT ETF (SRET) for its suitability as an income investment. The fund takes a rather blind approach at asset allocation in mirroring an index of simply the 30 highest yielding REITs in the world. Notwithstanding this, there are some solid common stocks held in the portfolio that can deliver a sustainable yield. Active managers might consider holding individual positions mentioned here, but SRET can be a convenient way of delivering a high yield without taking on a lot of volatility. The challenge is that they have OK distribution coverage and no money saved in UNII, so the distribution is a little precarious. Furthermore, both equity and mortgage REITs face some pretty substantial headwinds because of the flattening yield curve, so I don't expect much capital growth from either sector if interest rate trends persist.
Fund Overview Invests in the 30 highest yielding REIT common stocks
Tracks the Solactive Global SuperDividend REIT Index
Seeks to deliver high monthly income for shareholders
Assessing The Distribution
(Source: Original Image - Data from Yahoo Finance)
Because of their typically high dividend yields and relative safety, REIT common stocks have been touted as good picks for income investors. Although REIT income generally doesn't have any tax benefits, a sustainable 6-8% yield can be a boon to income investors hoping to avoid the interest rate sensitivity or default... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
STARWOOD PROPERTY TRUST 23.11   17.9 1.29 1.92 8.32
REDWOOD TRUST 16.63   13.1 1.27 1.20 7.25


Older articles featuring Starwood Property Trust (STWD):
2019 Half Year 10% Yield Update; Truth Behind High-Yield Is Revealed
Global X SuperDividend REIT ETF: 8% Yield Comes With Higher Risk
Dividend Portfolio Review: New Dividend Record For May
IShares Mortgage Real Estate ETF Has The Highest REIT Yield, But The Lowest Performance
ETF Month 2019 No. 1: Global X SuperDividend ETF Coverage Improves, But Is A Heavy Bet On Real Estate
Road To Financial Independence: New Dividend Record In March
Sector Study: Real Estate Dividend Dogs VS. Energy Dividend Dogs, Which To Buy?
2019 First Quarter Update, 10% High Yield Stocks Massive-Recovery
Global X SuperDividend REIT ETF: A Solution In Search Of A Problem?
Mutating The Hybrid Dividend Income Portfolio: Stocks Out, CEFs In