Published Mon, 30 Nov 2020 08:25:00 -0500 on Seeking Alpha
Seeking AlphaREITs2 High-Yielding REITs To Buy On Cyber MondayNov. 30, 2020 8:25 AM ET|| Includes: AAP, RIOCF, VNQ, WPCby: Jussi AskolaJussi Askola High Yield LandlordBecome a “Passive Landlord” with our 8% Yielding Real Estate Portfolio.SummaryPrices have gone up, and as a result, yields have come down.
The major REIT ETFs pay just around 3.5%. We aim to earn double of that.
We present two REITs with 6-8% dividend yields that we hold in our portfolio. They are great buys on today's Cyber Monday.
REITs are up by over 50% over the past six months, and finding high-yielding opportunities is increasingly difficult:
Data by YCharts
If you look at the largest REIT ETF, the Vanguard Real Estate ETF (VNQ), its yield is down to only 3.5%. Once you take into account taxes and inflation, you may be left with just around 2%. If you suffer a few dividend cuts, the yield could be even lower.
For a real estate investment, this is not acceptable for us. We strongly believe that real estate should be an income investment first. Private real estate investors commonly target 5-10% annual yields, and it should not be any different when investing in REITs.
Even putting total returns aside, a lot of investors would prefer to earn a higher dividend yield to meet passive income needs. Unfortunately, because REIT ETFs are so heavily invested in richly valued, low-yielding REITs, they fail to provide high income. In today's market, high income is only achieved by selective investors.
At High Yield Landlord, we target a safe and growing 6-8% dividend yield, and we achieve this by investing in smaller and lesser-known REITs that are deeply undervalued. Right now, our average portfolio yield is 6.2%, and it is backed by a low payout ratio that leaves sufficient retained cash flow to grow the dividend over time:
Our Portfolio is composed of what we believe to be the 25-best-REIT opportunities in today's market. Today, we discuss two of them that are worth... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|WP CAREY & CO||88.72||31.4||2.83||4.14||4.73|
|ADVANCE AUTO PARTS||155.20||25.8||6.01||0.24||0.16|
|RIOCAN REAL ESTATE INVESTMENT TRUST||19.83||0.0||0.00||0.00||0.00|
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