Real estate investment trusts offer some of the highest yields in the market. Maybe the best part about these investments is that they're legally required to distribute at least 90% of their earnings to shareholders via dividends.
JPMorgan said this week that the economic environment is set up well for REITs heading into 2020 given the combination of rising share prices and falling interest rates has provided historically low cost of capital for REITs. Within the REIT group, JPMorgan is most bullish on lease and health care, tech, residential and industrial REITs and most bearish on office, retail and hotel REITs.
In addition to the diversification real estate investment provides, the REIT payout mandate means that a number of REITs have extremely high yields. In fact, these eight REITs currently yield above 10%:
- New Residential Investment Corp (NYSE: NRZ), 13.4% yield.
- Two Harbors Investment Corp (NYSE: TWO), 12.1% yield.
- AGNC Investment Corp (NASDAQ: AGNC), 11.9% yield.
- Invesco Mortgage Capital Inc (NYSE: IVR), 11.7% yield.
- ANNALY CAP MGMT/SH (NYSE: NLY), 11.5% yield.
- MFA FINL INC/SH (NYSE: MFA), 10.8% yield.
- Macerich Co (NYSE: MAC), 10.4% yield.
- CHIMERA INVT CO/SH NEW (NYSE: CIM), 10.1% yield.
With the stock market near all-time highs and global interest rates falling, it’s getting harder and harder for long-term investors to find reliable sources of investment income. REITs and other high-yielding dividend stocks can help pick up the slack of low bond yields.
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