What 12 REITs Pay the Highest Dividend Yield
By: NED PIPLOVIC
Real estate investment trusts (REITs) are required to pay out at least 90% of their earnings as dividends to take advantage of favorable tax regulations. Because of these tax advantages, REITs usually offer high dividend yields.
Since REITS offer shares that are traded like stocks on major exchanges, REITs are easy and convenient ways for investors to gain access to real estate investments. Additionally, since shares of REITs can be easily sold on the exchanges and converted to cash much quicker than real estate properties, the investors can keep their assets relatively liquid.
Because of the 90% or more earnings distribution requirement, REITs are securities with some of the highest dividend yields. Among the REITs, here are the 12 companies that currently pay the highest yields.
Select Income REIT (NASDAQ:SIR)
The RMR Group LLC. serves as the external manager of the Select Income REIT. Based in Newton, Massachusetts, Select Income invests primarily in office and industrial buildings in the Hawaiian real estate markets.
The trust’s current dividend yield of 8.74% is based on the $2.04 annualized total dividend and the $23.16 closing share price as of October 26, 2017. Since starting to pay a dividend in 2012, the REIT hiked its dividend every year. Over the last 12 months, the share price is down 3.7%.
Ladder Capital Corp. (NYSE:LADR)
Founded in 2008 and headquartered in New York City, the Ladder Capital Corp. operates as a REIT through several segments. The Loans segment originates mortgage loans and invests in note purchase financings, subordinated debt, mezzanine debt and other commercial real estate structured finance products. Additionally, the Securities segment invests in commercial mortgage-backed securities and U.S. Agency Securities. Lastly, the Real Estate segment invests in commercial and residential leased properties, office buildings, condominium units and a warehouse.
The trust’s current 8.94% dividend yield is the result of a $1.20 annualized dividend and the $13.42 closing price on October 26, 2017. The REIT enhanced its quarterly dividend payout by a total of 20% since 2015. Over the last year the, the share price rose 6.8%.
Spirit Realty Capital, Inc. (NYSE:SRC)
Formed in 2003 and domiciled in Dallas, Spirit Realty Capital, Inc. is a publicly traded real estate investment trust. The firm’s primary focus is acquisition of single tenant real estate facilities, which are mostly free-standing, commercial real estate facilities for retail, service or distribution activities.
The REITs current $0.72 annual dividend and its $7.96 share price as of October 26, 2017, convert to a 9.04% dividend yield. The trust hiked its annual dividend every year since it started paying dividends in the fourth quarter of 2013. Unfortunately, the share price fell by a third over the past 12 months.
DDR Corp. (NYSE:DDR)
Based in Beachwood, Ohio, the DDR Corp. owns, develops and manages shopping centers in the United States and Puerto Rico. The firm operated as Developers Diversified Realty Corporation in the past.
The firm’s current share price of $7.88, as of October 26, 2017, and its annual dividend payout of $0.76 yield 9.64%. After more than a decade of rising annual dividends, the REIT cut its annual dividend significantly in 2009. However, the trust resumed hiking its annual dividends in 2011 and has continued the boosts over the past seven years. The share price is currently almost 50% lower than it was one year ago.
Apollo Commercial Real Estate Finance (NYSE:ARI)
Founded in 2009 and headquartered in New York City, the Apollo Commercial Real Estate Finance, Inc. primarily originates, acquires, invests in and manages commercial first mortgage loans, commercial mortgage-backed securities and other commercial real estate-related debt investments in the United States.
The trust’s share price closed at $18.09 on October 26, 2017, which combined with the current annual dividend amount of $1.84 yields 10.17%. The company paid a flat annual dividend between 2011 and 2014, raised its annual payout for two consecutive years in 2015 and 2016 and paid the same dividend in 2017 as it did in 2016. Over the past 12 months, the share price rose 7.5%.
Annaly Capital Management Inc. (NYSE:NLY)
Annaly Capital Management, Inc. invests in agency mortgage-backed securities and residential credit investments, as well as originates and invests in commercial mortgage loans, securities and other commercial real estate investments. Founded in 1997, Annaly Capital Management, Inc. is based in New York City.
The company’s 2017 annual dividend of $1.20 yields 10.43% against the $11.50 share price as of October 26, 2017. After experiencing some volatility between 1997 and 2013, the trust paid a steady $1.20 annual dividend over the last four consecutive years. Over the last year, the share price ascended almost 13%.
Anworth Mortgage Asset Corporation (NYSE:ANH)
Founded in 1997 and headquartered in Santa Monica, California, the Anworth Mortgage Asset Corporation invests in residential mortgage-backed securities that are guaranteed by government-sponsored enterprises, such as the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation. Additionally, the company invests in non-agency mortgage investments that are guaranteed by private institutions.
The firm’s $0.60 annual dividend distribution for 2017 and its $5.72 closing share price as of October 26, 2017, convert to a 10.49% yield. In addition to the high dividend yield, the company managed to grow its share price 16.5% for a combined total return of 29% over the past year.
Chimera Investment Corporation (NYSE:CIM)
Founded in 2007 and headquartered in New York City, the Chimera Investment Corporation REIT invests in residential mortgage-backed securities, residential mortgage loans, commercial mortgage loans and other real estate-related securities.
The trust’s current $18.29 share price and its $2.00 annual dividend amount for 2017 convert to a 10.93% dividend yield. The REIT has been paying a dividend for the past three years only. The share price rose 18% in the last 12 months and, combined with the dividend payout, is equivalent to a 31.26% one-year total return.
New Residential Investment Corp. (NYSE:NRZ)
The New Residential Investment Corp. REIT was founded in 2011 in New York City. The company invests in excess mortgage servicing rights on residential mortgage loans, servicer advances, residential mortgage backed securities and residential mortgage loans.
The company’s 2017 annual dividend of $1.94 yields 11.72% against the October 26, 2017, share price of $17.06. Since 2015, the trust raised its annual dividend every year. Also, the share price grew 22.9% over the past 12 months. The combined total return is 35.74% since late October 2016.
New Senior Investment Group Inc. (NYSE:SNR)
Based in New York City, the New Senior Investment Group is a REIT with a diversified portfolio of 148 senior housing properties located across 37 U.S. states.
The REIT’s 2017 total annualized dividend payout of $1.04 is equal to the 2016 dividend amount. Compared against the REIT’s current $8.79 share price as of October 26, 2017, the dividend yields 11.83%. The share price fell almost 15% over the past 12 months and wiped out all benefits of the high dividend income for a 9.24% total loss over the past year.
Uniti Group Inc. (NASDAQ:UNIT)
Founded in 2014 in Little Rock, Arkansas, the Uniti Group Inc., is an internally managed REIT that acquires and constructs communications infrastructure in the United States and Mexico. The trust acquires and leases data centers and telecommunications towers for wireless carriers, as well as provides local telephone, long-distance telephone and high-speed internet service.
The company’s $17.39 closing share price on October 26, 2017, and its 2017 annual dividend distribution of $2.40 convert to a 13.8% dividend yield. The company has been paying the same $0.60 quarterly dividend since the fourth quarter of 2015. Over the last 12 months, the share fell almost 40% for a combined one-year total loss of 34.6%.
Five Oaks Investment Corp. (NYSE:OAKS)
Founded in 2012 and headquartered in New York City, the Five Oaks Investment Corp. invests, finances and manages agency and non-agency residential mortgage-backed securities (MBS), multi-family MBS, residential mortgage loans, mortgage servicing rights and other mortgage-related investments. Oak Circle Capital Partners LLC. externally manages and advises the REIT.
The REIT’s $0.05 monthly dividend converts to a $0.60 annual payout to deliver a 14.74% dividend yield based on its current $4.07 share price. While the Five Oaks Investment Corp. offers the highest yield in the group, its share price fell 22.5% in the last 12 months. However, the strong dividend income offset the asset losses and the REIT managed a 17.8% total return for the past 12 months since October 2016.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.