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3 Highly-Ranked REITs Paying Investors Handsomely

When structuring a portfolio, it’s common to park cash in assets that generate income. After all, everybody loves getting paid.

However, not all assets stack up the same in terms of providing income.

One great way to invest for a stream of income is to target REITs (Real Estate Investment Trusts). REITs are companies that own – and typically operate – income-producing real estate or real estate-related assets.

It’s a widely-deployed strategy that allows individual investors to earn a share of the income generated through commercial real estate ownership without having to own commercial real estate.

To meet the qualifications to be a REIT, a company must have the bulk of its assets and income intertwined with real estate investment. In addition, the company must distribute at least 90% of its taxable income to shareholders annually via dividends.

It’s easy to see why income-focused investors love to target these companies.

For those seeking to invest in the space, a few highly-ranked REITs include National Retail Properties NNN, Kite Realty Group Trust KRG, and EPR Properties EPR.

On top of hefty dividend payouts, REITs are typically less volatile, as seen in the chart below that illustrates the year-to-date performance of all three stocks with the S&P 500 blended in as a benchmark.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

All three stocks have widely outperformed the S&P 500 year-to-date, undoubtedly a major positive. Let’s take a closer look at each company.

National Retail Properties

National Retail Properties NNN maintains a conservatively managed, diversified real estate portfolio with properties subject to long-term net leases with established tenants. The company sports a Zacks Rank #2 (Buy).

NNN’s dividend metrics would make any income investor celebrate. The company’s annual dividend yields a sizable 4.6%, much higher than its Zacks Finance Sector.

In addition, NNN has upped its dividend payout five times over the last five years, with a five-year annualized dividend growth rate of 2.5%.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

NNN’s top-line is in excellent health; the Zacks Consensus Sales Estimate for the company’s current fiscal year (FY22) resides at $770 million, reflecting a rock-solid 6.2% Y/Y increase. Below is a chart illustrating the company’s revenue on an annual basis, with its TTM revenue representing the final data plot.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Kite Realty Group Trust

Kite Realty Group Trust KRG is focused primarily on developing, constructing, acquiring, and operating high-quality neighborhood and community shopping centers in selected growth markets in the U.S. The company boasts a Zacks Rank #2 (Buy).

KRG thoroughly enjoys rewarding its shareholders – the company has increased its dividend payout a whopping nine times over the last five years. KRG’s annual dividend yield sits at an enticing 3.8%, well above its Zacks Sector average.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

In addition, the company’s top-line is projected to skyrocket; Kite Realty Group’s annual revenue is projected to reach $755 million in FY22, reflecting a massive 102% triple-digit year-over-year uptick.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

EPR Properties

EPR Properties EPR is a specialty real estate investment trust that invests in three primary segments: Entertainment, Recreation, and Education. As it stands, the company carries a Zacks Rank #2 (Buy).

EPR has rock-solid dividend metrics; the company’s annual dividend yields a sizable 6.4%, well above that of its Zacks Sector. In addition, EPR has increased its dividend four times over the previous five years.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Furthermore, EPR’s top-line growth is undoubtedly a positive – the Zacks Consensus Sales Estimate for the company’s current fiscal year resides at $575 million, penciling in a robust 20% uptick from FY21 sales of $480 million.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Bottom Line

Investing for income is a mega-popular way that some investors like to structure their portfolios. After all, it is a very lucrative strategy.

Receiving a steady income stream helps alleviate drawdowns in other positions and provides a higher level of flexibility.

REITs (Real Estate Investment Trusts) could be seen as a gold standard for income investing, as they must shell out at least 90% of taxable income to shareholders via dividends.

All three companies above carry a strong Zacks Rank and rock-solid dividend metrics, making them suited ideally for investors seeking stocks that provide an income stream paired with low-volatility natures.


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National Retail Properties (NNN) : Free Stock Analysis Report
 
Kite Realty Group Trust (KRG) : Free Stock Analysis Report
 
EPR Properties (EPR) : Free Stock Analysis Report
 
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Zacks Investment Research