With the mortgage REIT meltdown continuing to unravel, where can a REIT investor find safe and reliable dividends without the volatility of Mr. Market?
In an article earlier this week, Spicing Your Portfolio With Small-Cap REITs, I explained that there is value in small-cap REITs that are "flying under the radar". As I wrote, "the small-cap REITs lack the same Wall Street coverage and investor interest can result in shares remaining undervalued -- especially in down markets -- for extended periods of time."
One such REIT that is flying under the radar is UMH Properties
Yesterday I caught up with UMH CEO Sam Landy. In the interview, Landy explains the reason Warren Buffett has invested in Tennessee-based Clayton Homes. Following Buffett ain't a bad thing!
In addition, Landy offers insight into UMH's unique brand of renting, selling, and financing modular homes. As a misconception to many, modular homes are not mobile homes and Landy helps explain the difference and more importantly, why investors should consider buying shares in the $185 million (market cap) small cap REIT.
UMH shares are trading at $10.22 with a spicy dividend yield of 7.05%. UMH is well-positioned to increase its dividend in 2013 or 2014. The company has a strategically-aligned footprint that should allow the REIT to capitalize on affordable housing lot rentals as well as sales and finance growth. The company is well positioned for the housing market rebound and with a portfolio occupancy of 81%, UMH shares have significant upside.
At the time of publication the author had no position in any of the stocks mentioned.
This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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