3 REITs With Over 6% Dividend Yields That Smashed Earnings

Ethan Roberts
6 min read
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Nothing warms an investor's heart more than seeing companies in their portfolio with consistently increasing earnings that also beat the analysts' expectations.

With dozens of second-quarter real estate investment trust (REIT) earning reports coming out this week, take a look at three REITs with dividend yields above 6% that just beat Wall Street's second-quarter estimates for earnings and revenue.

EPR Properties (NYSE:EPR) is a Kansas City, Missouri-based diversified experiential REIT that owns and operates 363 movie theater chains, amusement parks, ski resorts, fitness centers and other recreational venues across 44 states and Canada.

For months, Wall Street has been concerned about potential defaults of some EPR Properties movie theater tenants. But on June 28, the REIT and Regal Cinemas allayed some fears by entering into a restructuring agreement and new master lease before its parent Cineworld's bankruptcy resolution. The new master lease will be on 31 of the 57 theaters that Regal leases.

Under the terms of the agreement, the theaters will have triple-net leases with $65 million in total annual fixed rent and will escalate by 10% every five years. EPR also reduced its overall portfolio with Regal by taking back 16 theaters that Regal was operating. EPR Properties intends to operate five of those and sell the remaining 11.

Although EPR Properties received upgrades from Keybanc and JMP Securities in June, on July 14, Raymond James analyst RJ Milligan downgraded EPR Properties from Strong Buy to Outperform and announced a $50 price target.

On Aug. 2, EPR Properties announced its second-quarter operating results. Funds from operations (FFO) of $1.28 beat the estimates of $1.26 and was up from FFO of $1.17 in the second quarter of 2022. Revenue of $172.19 million crushed the estimates of $148.66 million by 16.31% and was a 7.77% increase over revenue of $160.45 million in the second quarter of 2022.

EPR Properties has had a total return of 25.54% year to date, putting it among some of the best-performing of all REITs in 2023.

EPR Properties pays a monthly dividend of $0.275. The $3.30 forward annual dividend presently yields 7.6%.

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Vornado Realty Trust (NYSE:VNO) is a New York-based diversified REIT that owns and operates approximately 26 million square feet of commercial office buildings and some street-level retail establishments in New York, Chicago and San Francisco.  About 88% of its portfolio net operating income (NOI) is derived from properties in New York City. It's been trading on the New York Stock Exchange for over 60 years and has a market cap of $3.73 billion.

Vornado Realty also owns and operates advertising signage in the Penn District and Times Square areas of New York City, including a six-story high, 330-foot wide 4K LED sign on Broadway — the largest 4K LED sign in the world.

Vornado Realty also owns several other mixed-use buildings in New York City that contain offices, restaurants, fitness centers, outdoor gardens and lounges. Vornado Realty also has a 32.4% interest in Alexander's Inc. (NYSE:ALX), a REIT that owns six properties in the New York City metropolitan area.

On July 27, Vornado Realty announced it entered into an agreement to sell four retail properties in New York City and that it recently sold The Armory Show in New York City for a combined sales price of $124.4 million. The closings will take place in the third quarter of 2023. Vornado is expected to make a $20 million profit from the transactions.

On July 31, Vornado announced its second-quarter operating results. FFO of $0.72 per share was down from $0.83 per share in the second quarter of 2022 but beat the estimates of $0.64. Revenue of $472.36 million beat the estimates of $441.78 million by 6.93% and was a 4.16% increase over revenue of $453.49 million in the second quarter of 2022.

Vornado pays a quarterly dividend of $0.375. The $1.50 forward annual dividend presently yields 6.76%.

Kilroy Realty Corp. (NYSE:KRC) is a Los Angeles-based diversified REIT that owns and operates 52 offices, 14 retail, eight life science and six residential properties on the U.S. West Coast and Texas. Its portfolio totals 16.2 million square feet. Kilroy Realty Corp. is a member of the S&P Mid-Cap 400 Index. As of June 30, office and life science properties were 86.6% occupied and 88.6% leased. Its 1,000 residential units had an average occupancy rate of 92.7%.

Chairman and CEO John Kilroy recently announced his retirement at the end of 2023 after 32 years of operating Kilroy Realty. The board of directors has retained an executive search firm to find his replacement.

On July 31, Kilroy Realty announced its second-quarter operating results. FFO of $1.19 per share beat the estimates of $1.10 per share and was 2 cents above FFO of $1.17 per share in the second quarter of 2022. Revenue of $281.31 million beat the estimates of $279.06 million and was a 4.74% increase over revenue of $268.58 million in the second quarter of 2022.

Kilroy Realty presently pays a quarterly dividend of $0.54. The $2.16 forward annual dividend yields 6.19%.

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