Published Tue, 02 Jun 2020 13:00:00 -0400 on Seeking Alpha
REIT preferred stocks were one of the few places to hide within the high-yield real estate segment amid the violent volatility that rocked REITs during the depths of the pandemic.
Exhibiting fixed-income-like investment characteristics, among REITs that offer preferred shares, the performance of these securities has been an average of 17.4% higher in 2020 than their comparable common shares.
Excluding the handful of troubled retail and lodging REITs that have suspended their preferred distributions, dividend yields currently average around 7.0% compared to the 4.7% yield on REIT common stock.
Total returns of REIT preferreds have lagged the REIT common stock index, but REIT preferreds have exhibited significantly lower volatility, translated into risk-return ratios roughly on-par with REIT common shares.
We introduce our all-new REIT Preferred and Bond Tracker and highlight a handful of our favorite preferred issues. We also take a look at several ETFs and CEFs that focus on REIT preferreds.
REIT Preferreds & Bonds
We're excited to officially expand coverage to REIT preferred and exchange-listed bond securities. In our all-new REIT Preferred & Bond Tracker, we track all 172 REIT preferred securities and "baby-bonds" from 78 unique REIT issuers. Preferred stocks and "baby-bonds" generally offer more downside protection, but in exchange, these securities offer relatively limited upside potential outside of the limited number of “participating” preferred offerings.
(Hoya Capital Real Estate, Co-Produced with Brad Thomas)
REIT Preferred & Bond Overview
Preferred stocks are a type of hybrid security - straddling the line between common equity and bond - that entitles a shareholder to a fixed dividend, whose payment takes priority over that of common stock shareholders. A somewhat esoteric segment of the REIT investment landscape - but an under-the-radar favorite among yield-focused REIT investors - the usage of preferred equity... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|CBL & ASSOCIATES PROPERTIES||1.38||0.0||-0.95||0.35||27.34|
|AG MORTGAGE INVESTMENT TRUST||17.47||6.1||2.87||1.90||10.89|
|HERSHA HOSPITALITY TRUST||15.01||0.0||-0.54||1.12||7.42|
|NUVEEN REAL ESTATE INCOME FUND||10.71||0.0||0.00||0.00||6.99|
|EQUITY LIFESTYLE PROPERTIES||132.21||44.7||2.96||2.45||1.90|
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