One of the main reasons for investing in real estate investment trusts (REITs) is the kind of dividends many pay. While Treasury bonds are just beginning to catch up with inflation, some REITs offer better yields as long as investors are willing to accept the risks attached to owning them.
Here are eight high-dividend REITs priced for less than $10 per share:
ARMOUR Residential REIT Inc. (NYSE: ARR) pays a 17% dividend, and it’s priced at just $7.22 per share. It’s a mortgage real estate investment trust (REIT) with headquarters in Vero Beach, Florida. According to its website, it “ invests primarily in residential mortgage-backed securities issued or guaranteed by a United States Government-sponsored entity, such as the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) or guaranteed by the Government National Mortgage Administration (Ginnie Mae).” B. Riley Securities analysts, in July, 2022, reiterated a neutral rating on ARMOUR but lowered its price target from $9.50 to $8.00.
Brandywine Realty Trust (NYSE: BDN) is paying a 9.13% dividend, and shares are going for $8.43. The company owns over 24 million square feet with a total market capitalization of about $5 billion. Credit Suisse analysts initiated coverage of the REIT in June 2022 with a neutral rating. Brandywine recently beat Q2 FFO estimates by reporting $0.34 per share compared to $0.32 per share one year ago.
Broadmark Realty Capital Inc. (NYSE: BRMK) pays a dividend of 12.23%. The price of a share at the time of this writing is $6.93. This REIT is based in Seattle and works with commercial and residential real estate projects across the country. Analysts at Piper Sandler initiated coverage of Broadmark in June 2022 with a neutral rating.
Annaly Capital Management Inc. (NYSE: NLY) is paying a 13.56% dividend with shares priced at $6.60. With headquarters in New York City, it’s one of the big mortgage REITs. Annaly describes its work this way: “Our diversified investment strategies include agency mortgage-backed securities, mortgage servicing rights and residential real estate.” Piper Sandler maintains a neutral on Annaly while Keefe, Bruyette and Woods upgraded it in June from market perform to outperform. The REIT’s price-to-earnings ratio of just 2.73 is unusually low.
New York Mortgage Trust Inc. (NASDAQ: NYMT) pays a 13.99% dividend. Shares are trading today at $2.89. Founded in New York, New York in 2003, this REIT has an investment portfolio value of $3.6 billion, according to its website. Analysts are unenthusiastic about the REIT: Keefe, Bruyette and Woods in July 2022 downgraded their opinion of it from outperform to market perform. Jones Trading maintained its Buy rating this month with a price target of $4.
Orchid Island Capital Inc. (NYSE: ORC) currently offers investors a dividend of 13.91%. The price per share as of this writing is $2.85. The REIT says it’s “a specialty finance company that invests in residential mortgage-backed securities on a leveraged basis. Income generated for distribution to our shareholders is based primarily on the difference between the yield on our mortgage assets and the cost of our borrowings.” In January 2022, JMP Securities initiated coverage of Orchid Island Capital with a market perform rating, but Ladenburg Thalmann recently downgraded its rating to neutral.
Redwood Trust Inc. (NYSE: RWT) is paying an 11.54% dividend and is priced at $8.15 per share. According to the company website, Redwood invests “in mortgages for single-family and rental properties...and also acquires, sells and securitizes residential loans.” Last month, Raymond James maintained its strong buy rating for the REIT with a price target of $13.50 per share.
Two Harbors Investment Corp. (NYSE: TWO) pays a dividend of 13.93% and goes for $4.95 per share. This mortgage REIT, based in St. Louis, is “focused on investing in, financing and managing Agency residential mortgage-backed securities (Agency RMBS).” RBC Capital maintained its outperform rating this month with a price target of $5.50 per share.
Making an investment in a company based on dividend yield requires thoughtful consideration of all factors involved, especially the macroeconomic ones related to Fed policy. Going for high yield can be a risky venture, and serious thought should be applied before money is invested.
Today’s Private Market Offering Highlights
Arrived Homes, the company that allows investors to buy shares of single-family rental homes, is set to launch 14 new rental properties on its platform with a minimum investment of $100. Average dividend yields on previous offerings range from 3% to 7.6% annually.
The private debt investment platform Percent launched a new corporate debt offering for Taiger, an international, VC-backed software company, with a 15-17% APY. The platform’s recent H1 update shows an average historical yield of 12.38%.
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Not investment advice. For educational purposes only.
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