I'm looking at other REIT sectors right now that are at least giving yields over 6%. Although MAA is my favorite residential REIT and a great company, I just picked up shares of, Lexington Properties. LXP. 6.90% yield and they are considered a diversified REIT. (Industrial, office, retail). I'd put money in CDs before i'd buy residential REITs at these prices
Cash-flow for Residential REIT's is mainly apartment rents and it is does not seem going down any time soon. I am not sure how much decreasing, (if they do go down at all), property values of rental properties would affect the bottom line, but I do not see rents or demand for apartements going down much (guest worker bill is going through!!). So I think a company with solid history and management cannot be compared with rest of speculative stocks. I will dip in at dips here!! IMHO.
The company is earning about what it did when it traded in the low 20s. The only thing that has really changed is investor appetite for yield stocks, which creates momentum, which has created an overpriced stock. Happens all the time in the market. The other thing that has changed recently, to REITs holders detriment, is that short term interest rates have gone up on other investments, like risk-free CDs and some money market funds. REITs are hardly the only thing that you can get 4% on anymore.
Sure, rents will keep coming in, and business will hum along. But, will new buyers be willing to buy this priced at a 4% yield when they can get that risk-free somewhere else? Most of the current holders didn't and probably wouldn't. And, without new buyers, stocks go down.
I hope it goes back to $58 or so. Buying puts is almost risk-free at those levels.