REIT dividend stock picks

By: ispeculatornew
Date posted: 11.09.2010 (4:00 am) | Write a Comment  (0 Comments)

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Real Estate has been a major source of discussion on this blog and in almost any financial media or blog in the past few years as the price crash turned out to be a key component of the stock market crash and struggle of the US and world economy. While some still believe that real estate prices are too high, the major correction that has taken place certainly gives a lot more upsize than downsize.

Of course every region is different but the prices in the US have been more stable in the last year after falling off of a cliff.

The “bottom” of the real estate market will create a much more stable environment for owners of real estate and buying REIT’s (Real Estate Income Trusts) is something that passive income dividend investors should strongly consider. REIT’s typically offer good returns that include stable dividends.

There are many different ways to get exposure to the real estate market. Buying a REIT ETF is certainly a good way to do it and something that we have discussed in the past. But looking into the specific REIT’s can also be quite interesting.

Before getting started, you can see a chart of the S&P/Schiller Housing index and see that prices seem to have stabilized.

I took a look at REIT’s that pay dividends trying to find names that offer a high dividend and can afford to keep it going and even hopefully increase it. Take a look at the top REIT’s as per their dividend yield:

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I would obviously ignore a few of the companies mentioned here since a few either:

-Have a payout ratio over 100% (paying more than they are making)
-Are not making any money at the moment (N/A payout ratio).

Those companies likely will be unable to continue paying their high dividends. Others however have a fairly stable dividend over 10% and seem Some of these companies have the ability to keep things up. I think the most important is to go over their financial statements to make sure that   their most recent financial statements show enough earnings and a positive “trend” (increasing revenues & profits ideally). So what is your opinion, do you expect to buy a REIT in your passive dividend portfolio?

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