Boost Your Investment Income with Real Estate Investment Trusts
Investors seeking to enhance their investment income may find real estate investment trusts (REITs) an attractive option. REITs own or finance income-generating real estate, such as office buildings, apartments, or retail centers, and provide shareholders with consistent dividend payouts.
Tax Advantages of REITs
To maintain their special tax status, REITs must distribute at least 90% of their taxable income to shareholders annually. This requirement allows REITs to avoid paying corporate income taxes, making them a compelling choice for income investors.
High-Yielding REITs: More Than Just Yield
While high-yielding REITs can be attractive, they aren’t always a sure bet. Investors should analyze a company’s fundamentals to ensure its high dividend is sustainable. Factors such as valuation, management team, balance sheet strength, and growth prospects are equally important.
10 High-Yield REITs to Consider
Here are 10 high-yield REITs selected for their potential to supercharge your portfolio:
Orchid Island Capital Inc. (NYSE: ORC)
Orchid Island Capital is a mortgage REIT that specializes in residential mortgage-backed securities. Despite reporting a net loss in the second quarter, the company continued distributing dividends to shareholders.
Two Harbors Investment Corp. (NYSE: TWO)
Two Harbors is a REIT that specializes in residential mortgages. The company generates most of its revenue through interest income from its available-for-sale securities. Despite challenging market conditions, Two Harbors maintained a stable book value and declared a second-quarter dividend.
Armour Residential REIT (NYSE: ARR)
Armour Residential primarily invests in residential mortgage-backed securities issued by government-sponsored entities. The company reported a GAAP net loss in the second quarter but generated net interest income and distributable earnings.
Dynex Capital Inc. (NYSE: DX)
Dynex Capital primarily invests in mortgage-backed securities on a leveraged basis. The company reported a comprehensive loss in the second quarter but declared a dividend of $0.39 per common share.
Ellington Credit Co. (NYSE: EARN)
Ellington Credit is a financial firm that invests in residential mortgage and real estate assets. The company reported a net loss in the second quarter but achieved adjusted distributable earnings sufficient to cover the dividend paid during the quarter.
AGNC Investment Corp. (NASDAQ: AGNC)
AGNC Investment is a mortgage REIT that primarily invests in agency mortgage-backed securities using leverage. The company reported a comprehensive loss in the second quarter but maintained a tangible net book value per common share of $8.40.
Ares Commercial Real Estate (NYSE: ACRE)
Ares Commercial specializes in commercial real estate loans. The company reported a decline in second-quarter earnings due to challenges in the commercial real estate market.
New York Mortgage Trust Inc. (NASDAQ: NYMT)
New York Mortgage Trust invests in real estate-related assets like residential mortgage loans, preferred equity, and joint venture equity. The company reported an adjusted earnings loss in the second quarter, missing analyst expectations.
Sachem Capital Corp. (NYSEAMERICAN: SACH)
Sachem Capital is a Connecticut-based real estate finance company specializing in short-term loans secured by real estate. The company reported a decline in total revenue in the second quarter due to a decrease in loan originations.
Global Net Lease Inc. (NYSE: GNL)
Global Net Lease invests in commercial properties in the U.S. and Europe, primarily through sale-leaseback transactions. The company reported a net loss per share in the second quarter, missing analyst expectations.
These high-yield REITs offer attractive income opportunities, but it’s essential to carefully evaluate each company’s fundamentals before investing.
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