S&P 500   4,191.98
DOW   33,426.63
QQQ   336.51
Mount Etna volcano erupts, raining ash on Catania, forcing flight suspension at local airport
Sell every Stock except ONE (Ad)
China tells tech manufacturers to stop using Micron chips, stepping up feud with United States
Stock market today: Asian shares mostly rise despite worries about US debt talks
Sell every Stock except ONE (Ad)
SpaceX launches two Saudi astronauts on private flight to space station
Civil rights groups warn tourists about Florida in wake of 'hostile' laws
Laser breakthrough could send stock soaring 2,467% (Ad)
South Korean, German leaders agree to cooperate on supply chains, North Korea
Animal rights activists protest octopus farm plans in Spain
S&P 500   4,191.98
DOW   33,426.63
QQQ   336.51
Mount Etna volcano erupts, raining ash on Catania, forcing flight suspension at local airport
Sell every Stock except ONE (Ad)
China tells tech manufacturers to stop using Micron chips, stepping up feud with United States
Stock market today: Asian shares mostly rise despite worries about US debt talks
Sell every Stock except ONE (Ad)
SpaceX launches two Saudi astronauts on private flight to space station
Civil rights groups warn tourists about Florida in wake of 'hostile' laws
Laser breakthrough could send stock soaring 2,467% (Ad)
South Korean, German leaders agree to cooperate on supply chains, North Korea
Animal rights activists protest octopus farm plans in Spain
S&P 500   4,191.98
DOW   33,426.63
QQQ   336.51
Mount Etna volcano erupts, raining ash on Catania, forcing flight suspension at local airport
Sell every Stock except ONE (Ad)
China tells tech manufacturers to stop using Micron chips, stepping up feud with United States
Stock market today: Asian shares mostly rise despite worries about US debt talks
Sell every Stock except ONE (Ad)
SpaceX launches two Saudi astronauts on private flight to space station
Civil rights groups warn tourists about Florida in wake of 'hostile' laws
Laser breakthrough could send stock soaring 2,467% (Ad)
South Korean, German leaders agree to cooperate on supply chains, North Korea
Animal rights activists protest octopus farm plans in Spain
S&P 500   4,191.98
DOW   33,426.63
QQQ   336.51
Mount Etna volcano erupts, raining ash on Catania, forcing flight suspension at local airport
Sell every Stock except ONE (Ad)
China tells tech manufacturers to stop using Micron chips, stepping up feud with United States
Stock market today: Asian shares mostly rise despite worries about US debt talks
Sell every Stock except ONE (Ad)
SpaceX launches two Saudi astronauts on private flight to space station
Civil rights groups warn tourists about Florida in wake of 'hostile' laws
Laser breakthrough could send stock soaring 2,467% (Ad)
South Korean, German leaders agree to cooperate on supply chains, North Korea
Animal rights activists protest octopus farm plans in Spain

High Dividend REITs

Below you will find a list of real estate investment trusts (REITs) that offer dividend yields of 4% or higher that trade on the New York Stock Exchange and the NASDAQ. Please note that the listed annual payout and dividend yield is based on the previous 12 months of dividend payments. If a REIT has cut their dividend in the last 12 months, the indicated annual payout and dividend yield may not represent what the company plans to pay out in dividends moving forward. Learn more about high-yield REITs.

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Media sentiment refers to the percentage of positive news stories versus negative news stories a company has received in the past week.
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CompanyCurrent PriceDividend YieldAnnual Payout3-Year Dividend GrowthPayout RatioEx-Dividend DateIndicator(s)
Cherry Hill Mortgage Investment Co. stock logo
CHMI
Cherry Hill Mortgage Investment
$5.03
-0.8%
21.47%$1.08-15.34%100.93%N/A
Brandywine Realty Trust stock logo
BDN
Brandywine Realty Trust
$3.65
flat
20.82%$0.76N/AN/AN/APositive News
ARMOUR Residential REIT, Inc. stock logo
ARR
ARMOUR Residential REIT
$4.82
-1.7%
19.92%$0.96-17.54%85.71%N/A
Two Harbors Investment Corp. stock logo
TWO
Two Harbors Investment
$12.31
-0.5%
19.50%$2.40-26.61%100.00%N/A
Orchid Island Capital, Inc. stock logo
ORC
Orchid Island Capital
$10.01
-0.6%
19.18%$1.92-18.12%225.88%5/30/2023
Chimera Investment Co. stock logo
CIM
Chimera Investment
$4.81
-3.5%
19.13%$0.92-17.57%102.22%N/AAnalyst Report
The Necessity Retail REIT, Inc. stock logo
RTL
Necessity Retail REIT
$4.69
+1.3%
18.12%$0.85N/AN/AN/AGap Up
Granite Point Mortgage Trust Inc. stock logo
GPMT
Granite Point Mortgage Trust
$4.59
+3.7%
17.43%$0.80-17.31%114.29%N/APositive News
Western Asset Mortgage Capital Co. stock logo
WMC
Western Asset Mortgage Capital
$8.20
-1.0%
17.07%$1.40-53.58%N/AN/A
TPG RE Finance Trust, Inc. stock logo
TRTX
TPG RE Finance Trust
$5.68
flat
16.90%$0.96-17.67%101.05%N/APositive News
City Office REIT, Inc. stock logo
CIO
City Office REIT
$4.76
+2.1%
16.81%$0.80-5.23%N/A7/6/2023
New York Mortgage Trust, Inc. stock logo
NYMT
New York Mortgage Trust
$9.81
-1.3%
16.31%$1.60-20.63%173.91%N/APositive News
Uniti Group Inc. stock logo
UNIT
Uniti Group
$3.70
-1.1%
16.22%$0.6017.49%127.66%6/15/2023
KKR Real Estate Finance Trust Inc. stock logo
KREF
KKR Real Estate Finance Trust
$10.81
-0.8%
15.91%$1.72N/A95.56%N/APositive News
Redwood Trust, Inc. stock logo
RWT
Redwood Trust
$5.82
+0.2%
15.81%$0.92-8.48%113.58%N/APositive News
AGNC Investment Corp. stock logo
AGNC
AGNC Investment
$9.21
-0.8%
15.64%$1.44-10.37%64.29%5/30/2023
Global Net Lease, Inc. stock logo
GNL
Global Net Lease
$10.35
+0.9%
15.46%$1.60-3.40%444.44%N/A
Medical Properties Trust, Inc. stock logo
MPW
Medical Properties Trust
$7.68
-1.3%
15.10%$1.164.38%116.00%6/14/2023
Invesco Mortgage Capital Inc. stock logo
IVR
Invesco Mortgage Capital
$10.60
-2.0%
15.09%$1.60-44.87%37.21%N/A
Ares Commercial Real Estate Co. stock logo
ACRE
Ares Commercial Real Estate
$8.78
-1.0%
15.03%$1.32N/A97.06%6/29/2023
Ready Capital Co. stock logo
RC
Ready Capital
$10.72
-0.9%
14.93%$1.601.23%99.38%5/26/2023Dividend Cut
Great Ajax Corp. stock logo
AJX
Great Ajax
$5.49
-0.4%
14.57%$0.80-5.01%102.56%N/A
SL Green Realty Corp. stock logo
SLG
SL Green Realty
$22.54
-0.8%
14.42%$3.250.42%N/A5/30/2023Dividend Increase
Dynex Capital, Inc. stock logo
DX
Dynex Capital
$10.85
-2.6%
14.38%$1.56-8.11%1,560.00%N/AEx-Dividend
NexPoint Real Estate Finance, Inc. stock logo
NREF
NexPoint Real Estate Finance
$14.01
-0.4%
14.28%$2.00N/A100.00%6/14/2023
Blackstone Mortgage Trust, Inc. stock logo
BXMT
Blackstone Mortgage Trust
$17.67
-1.8%
14.04%$2.48N/A93.94%N/APositive News
Apollo Commercial Real Estate Finance, Inc. stock logo
ARI
Apollo Commercial Real Estate Finance
$10.09
-0.6%
13.88%$1.40-8.71%89.74%N/A
BrightSpire Capital, Inc. stock logo
BRSP
BrightSpire Capital
$5.82
flat
13.75%$0.80N/AN/AN/A
Arbor Realty Trust, Inc. stock logo
ABR
Arbor Realty Trust
$12.30
-4.1%
13.66%$1.6810.54%92.31%N/APositive News
Annaly Capital Management, Inc. stock logo
NLY
Annaly Capital Management
$19.16
+0.3%
13.57%$2.60-3.79%87.84%N/APositive News
PennyMac Mortgage Investment Trust stock logo
PMT
PennyMac Mortgage Investment Trust
$11.83
-0.8%
13.52%$1.60-1.26%95.81%N/APositive News
Ellington Residential Mortgage REIT stock logo
EARN
Ellington Residential Mortgage REIT
$7.17
-0.3%
13.39%$0.96-4.12%80.00%5/30/2023Analyst Upgrade
Chicago Atlantic Real Estate Finance, Inc. stock logo
REFI
Chicago Atlantic Real Estate Finance
$14.08
-1.4%
13.35%$1.88N/AN/AN/A
AG Mortgage Investment Trust, Inc. stock logo
MITT
AG Mortgage Investment Trust
$5.47
-1.5%
13.16%$0.72-47.83%96.00%N/A
Lument Finance Trust, Inc. stock logo
LFT
Lument Finance Trust
$1.83
+2.2%
13.11%$0.24N/AN/AN/APositive News
MFA Financial, Inc. stock logo
MFA
MFA Financial
$10.77
-0.2%
13.00%$1.40-25.19%66.67%N/A
Rithm Capital Corp. stock logo
RITM
Rithm Capital
$8.22
-0.2%
12.17%$1.00-20.63%66.67%N/APositive News
Vornado Realty Trust stock logo
VNO
Vornado Realty Trust
$13.13
-0.2%
11.42%$1.50-7.05%N/AN/A
Starwood Property Trust, Inc. stock logo
STWD
Starwood Property Trust
$17.00
-0.4%
11.29%$1.92N/A91.87%N/A
Alexander's, Inc. stock logo
ALX
Alexander's
$161.43
-4.1%
11.15%$18.00N/AN/AN/AHigh Trading Volume
Sabra Health Care REIT, Inc. stock logo
SBRA
Sabra Health Care REIT
$10.88
-2.0%
11.03%$1.20-12.64%260.87%N/APositive News
Franklin BSP Realty Trust, Inc. stock logo
FBRT
Franklin BSP Realty Trust
$13.41
-1.3%
10.59%$1.42N/AN/AN/APositive News
Presidio Property Trust, Inc. stock logo
SQFT
Presidio Property Trust
$0.85
+0.3%
10.59%$0.09N/AN/AN/A
Generation Income Properties, Inc. stock logo
GIPR
Generation Income Properties
$4.39
-0.2%
10.48%$0.46N/AN/A6/14/2023Dividend Announcement
Service Properties Trust stock logo
SVC
Service Properties Trust
$8.05
-0.7%
9.94%$0.80-24.76%N/AN/A
Global Medical REIT Inc. stock logo
GMRE
Global Medical REIT
$8.58
-2.0%
9.79%$0.841.64%840.00%N/A
Highwoods Properties, Inc. stock logo
HIW
Highwoods Properties
$20.58
-0.4%
9.72%$2.001.72%196.08%N/AEx-Dividend
Ladder Capital Corp stock logo
LADR
Ladder Capital
$9.62
-0.5%
9.56%$0.92-13.51%73.60%N/APositive News
CTO Realty Growth, Inc. stock logo
CTO
CTO Realty Growth
$16.22
-0.5%
9.37%$1.52172.26%N/AN/APositive News
Omega Healthcare Investors, Inc. stock logo
OHI
Omega Healthcare Investors
$29.22
-0.2%
9.17%$2.680.38%201.50%N/A
Manhattan Bridge Capital, Inc. stock logo
LOAN
Manhattan Bridge Capital
$4.93
-1.0%
9.13%$0.451.37%N/A7/7/2023Gap Up
One Liberty Properties, Inc. stock logo
OLP
One Liberty Properties
$20.33
-0.5%
8.85%$1.80N/A225.00%N/A
Broadmark Realty Capital Inc. stock logo
BRMK
Broadmark Realty Capital
$4.92
-0.6%
8.54%$0.4285.82%95.45%5/23/2023
Modiv Inc. stock logo
MDV
Modiv
$14.04
-0.8%
8.19%$1.15N/AN/A5/30/2023Earnings Report
Analyst Revision
Outfront Media Inc. stock logo
OUT
Outfront Media
$14.72
+0.5%
8.15%$1.20-5.90%130.43%6/1/2023
Kilroy Realty Co. stock logo
KRC
Kilroy Realty
$26.86
+0.1%
8.04%$2.163.54%141.18%N/A
Boston Properties, Inc. stock logo
BXP
Boston Properties
$49.08
-0.6%
7.99%$3.920.78%126.05%N/A
EPR Properties stock logo
EPR
EPR Properties
$41.97
+0.3%
7.86%$3.30-10.28%136.93%5/30/2023Dividend Announcement
Easterly Government Properties, Inc. stock logo
DEA
Easterly Government Properties
$13.60
-1.0%
7.79%$1.060.64%623.53%N/A
Clipper Realty Inc. stock logo
CLPR
Clipper Realty
$5.02
-0.8%
7.57%$0.38N/AN/AN/A
The Macerich Company stock logo
MAC
Macerich
$9.55
+2.6%
7.12%$0.68-40.88%N/AN/A
Alpine Income Property Trust, Inc. stock logo
PINE
Alpine Income Property Trust
$15.62
-0.1%
7.04%$1.10N/AN/AN/APositive News
LTC Properties, Inc. stock logo
LTC
LTC Properties
$32.50
-0.4%
7.02%$2.287.72%120.63%5/22/2023
Paramount Group, Inc. stock logo
PGRE
Paramount Group
$4.44
+2.3%
6.98%$0.31-8.15%N/AN/A
American Assets Trust, Inc. stock logo
AAT
American Assets Trust
$18.97
+0.7%
6.96%$1.323.94%176.00%6/7/2023Positive News
Broadstone Net Lease, Inc. stock logo
BNL
Broadstone Net Lease
$15.89
-0.8%
6.92%$1.10N/A192.98%6/29/2023Positive News
National Health Investors, Inc. stock logo
NHI
National Health Investors
$52.50
-0.6%
6.86%$3.60-5.01%119.21%6/29/2023
Simon Property Group, Inc. stock logo
SPG
Simon Property Group
$105.36
-0.2%
6.83%$7.20-5.97%105.73%6/8/2023
Saul Centers, Inc. stock logo
BFS
Saul Centers
$34.74
-2.2%
6.79%$2.363.35%N/AN/AAnalyst Revision
Douglas Emmett, Inc. stock logo
DEI
Douglas Emmett
$11.21
+1.7%
6.78%$0.76-0.95%281.48%N/A
Orion Office REIT Inc. stock logo
ONL
Orion Office REIT
$5.90
+0.3%
6.78%$0.40N/AN/A6/29/2023
Creative Media & Community Trust Co. stock logo
CMCT
Creative Media & Community Trust Co.
$5.03
-0.4%
6.76%$0.34-27.73%N/AN/APositive News
Gap Up
Physicians Realty Trust stock logo
DOC
Physicians Realty Trust
$13.83
-1.1%
6.65%$0.92N/A400.00%N/APositive News
Healthcare Realty Trust Incorporated stock logo
HR
Healthcare Realty Trust
$18.95
-1.6%
6.54%$1.241.10%N/AN/APositive News
Universal Health Realty Income Trust stock logo
UHT
Universal Health Realty Income Trust
$43.84
-0.9%
6.52%$2.861.45%N/AN/APositive News
Postal Realty Trust, Inc. stock logo
PSTL
Postal Realty Trust
$14.64
-0.3%
6.49%$0.9587.65%1,357.14%N/APositive News
Cousins Properties Incorporated stock logo
CUZ
Cousins Properties
$19.98
+0.8%
6.41%$1.283.34%200.00%N/A
Apple Hospitality REIT, Inc. stock logo
APLE
Apple Hospitality REIT
$15.20
-0.7%
6.32%$0.96-17.25%107.87%5/30/2023Dividend Announcement
W. P. Carey Inc. stock logo
WPC
W. P. Carey
$68.73
+0.2%
6.21%$4.270.81%191.48%N/A
Hannon Armstrong Sustainable Infrastructure Capital, Inc. stock logo
HASI
Hannon Armstrong Sustainable Infrastructure Capital
$25.61
-0.7%
6.17%$1.583.83%65.83%7/3/2023
RPT Realty stock logo
RPT
RPT Realty
$9.09
+0.3%
6.16%$0.56-16.08%N/A6/16/2023
Healthpeak Properties, Inc. stock logo
PEAK
Healthpeak Properties
$19.90
-1.5%
6.03%$1.20N/A226.42%N/A
JBG SMITH Properties stock logo
JBGS
JBG SMITH Properties
$15.18
+0.5%
5.93%$0.90N/AN/A6/22/2023
Gaming and Leisure Properties, Inc. stock logo
GLPI
Gaming and Leisure Properties
$48.62
-0.4%
5.92%$2.880.78%103.23%N/A
National Storage Affiliates Trust stock logo
NSA
National Storage Affiliates Trust
$37.51
+0.9%
5.87%$2.2019.18%209.52%N/APositive News
Medalist Diversified REIT, Inc. stock logo
MDRR
Medalist Diversified REIT
$5.46
+1.1%
5.86%$0.32-57.47%N/AN/AGap Down
CareTrust REIT, Inc. stock logo
CTRE
CareTrust REIT
$19.32
-0.3%
5.80%$1.126.92%108.74%N/A
Global Self Storage, Inc. stock logo
SELF
Global Self Storage
$5.05
-0.8%
5.74%$0.291.89%N/AN/A
Acadia Realty Trust stock logo
AKR
Acadia Realty Trust
$12.72
-1.3%
5.66%$0.72-13.95%480.00%6/29/2023Positive News
Whitestone REIT stock logo
WSR
Whitestone REIT
$8.61
+0.3%
5.57%$0.48-25.05%92.31%6/1/2023Dividend Announcement
High Trading Volume
BRT Apartments Corp. stock logo
BRT
BRT Apartments
$17.95
+1.7%
5.57%$1.005.27%N/AN/A
Crown Castle Inc. stock logo
CCI
Crown Castle
$113.08
-0.8%
5.54%$6.269.31%180.92%6/14/2023
Community Healthcare Trust Incorporated stock logo
CHCT
Community Healthcare Trust
$33.40
-2.2%
5.39%$1.802.37%159.29%N/APositive News
Digital Realty Trust, Inc. stock logo
DLR
Digital Realty Trust
$90.75
-3.8%
5.38%$4.884.15%375.38%N/APositive News
UMH Properties, Inc. stock logo
UMH
UMH Properties
$15.44
-1.4%
5.31%$0.823.57%1,640.00%N/A
Four Corners Property Trust, Inc. stock logo
FCPT
Four Corners Property Trust
$25.70
-0.4%
5.29%$1.364.64%119.30%N/APositive News
Lamar Advertising stock logo
LAMR
Lamar Advertising
$94.53
-0.2%
5.29%$5.006.97%89.13%6/15/2023
Brixmor Property Group Inc. stock logo
BRX
Brixmor Property Group
$20.26
-0.7%
5.13%$1.04-4.50%115.56%7/3/2023
NNN REIT, Inc stock logo
NNN
NNN REIT
$42.86
-0.5%
5.13%$2.202.09%111.68%N/A
Apartment Income REIT Corp. stock logo
AIRC
Apartment Income REIT
$35.17
+0.1%
5.12%$1.80N/AN/AN/AAnalyst Report
Realty Income Co. stock logo
O
Realty Income
$59.97
-0.2%
5.10%$3.063.00%208.16%5/31/2023Dividend Announcement
Urstadt Biddle Properties Inc. stock logo
UBA
Urstadt Biddle Properties
$19.80
-1.5%
5.05%$1.00-4.50%108.70%N/AHigh Trading Volume
Kimco Realty Corp stock logo
KIM
Kimco Realty
$18.32
-0.3%
5.02%$0.92-9.14%137.31%6/7/2023
Tanger Factory Outlet Centers, Inc. stock logo
SKT
Tanger Factory Outlet Centers
$19.55
-0.5%
5.01%$0.98-11.37%142.03%N/A
Corporate Office Properties Trust stock logo
OFC
Corporate Office Properties Trust
$22.85
-1.2%
4.99%$1.14N/A99.13%6/29/2023
VICI Properties Inc. stock logo
VICI
VICI Properties
$31.60
+0.7%
4.94%$1.568.63%60.94%N/A
Centerspace stock logo
CSR
Centerspace
$59.27
-0.2%
4.93%$2.92N/AN/AN/A
LXP Industrial Trust stock logo
LXP
LXP Industrial Trust
$10.16
+0.1%
4.92%$0.505.55%5,000.00%N/A
Braemar Hotels & Resorts  stock logo
BHR
Braemar Hotels & Resorts
$4.08
flat
4.90%$0.20-50.00%N/A6/29/2023
Federal Realty Investment Trust stock logo
FRT
Federal Realty Investment Trust
$88.74
-0.6%
4.87%$4.321.27%168.75%6/21/2023Positive News
Retail Opportunity Investments Corp. stock logo
ROIC
Retail Opportunity Investments
$12.35
-0.7%
4.86%$0.60-10.76%176.47%6/15/2023Positive News
Alexander & Baldwin, Inc. stock logo
ALEX
Alexander & Baldwin
$18.50
-0.5%
4.76%$0.886.35%N/A6/15/2023
Kite Realty Group Trust stock logo
KRG
Kite Realty Group Trust
$20.26
-1.2%
4.74%$0.96-11.85%2,400.00%7/6/2023Positive News
Urstadt Biddle Properties Inc. stock logo
UBP
Urstadt Biddle Properties
$19.46
-1.2%
4.62%$0.90-4.11%97.83%N/AGap Down
High Trading Volume
Elme Communities stock logo
ELME
Elme Communities
$15.89
+1.1%
4.53%$0.72N/AN/A6/21/2023
Regency Centers Co. stock logo
REG
Regency Centers
$57.63
-1.1%
4.51%$2.602.57%121.50%6/13/2023Dividend Announcement
Analyst Report
Essential Properties Realty Trust, Inc. stock logo
EPRT
Essential Properties Realty Trust
$24.46
0.0%
4.50%$1.106.90%108.91%N/APositive News
Iron Mountain Incorporated stock logo
IRM
Iron Mountain
$55.36
+0.3%
4.46%$2.470.31%182.96%6/14/2023Analyst Downgrade
Agree Realty Co. stock logo
ADC
Agree Realty
$65.93
-0.2%
4.43%$2.927.15%163.13%5/30/2023Positive News
SITE Centers Corp. stock logo
SITC
SITE Centers
$11.77
-0.5%
4.42%$0.52-13.38%325.00%6/13/2023
NETSTREIT Corp. stock logo
NTST
NETSTREIT
$18.13
+0.2%
4.41%$0.80N/A320.00%5/31/2023
Essex Property Trust, Inc. stock logo
ESS
Essex Property Trust
$209.78
+0.1%
4.40%$9.244.10%154.26%6/29/2023Analyst Report
Extra Space Storage Inc. stock logo
EXR
Extra Space Storage
$148.10
-0.7%
4.38%$6.4819.01%102.37%N/AAnalyst Revision
CubeSmart stock logo
CUBE
CubeSmart
$44.91
+0.3%
4.36%$1.9611.33%111.36%6/30/2023Dividend Announcement
Equity Residential stock logo
EQR
Equity Residential
$61.45
+0.2%
4.31%$2.653.27%157.74%N/AAnalyst Report
STAG Industrial, Inc. stock logo
STAG
STAG Industrial
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REITs provide a guaranteed dividend that serves as a hedge against inflation

A Real Estate Investment Trust (REIT) is defined as a number of real estate companies that own a portfolio of income-producing real estate assets. Because of their business model, investing in a REIT allows investors to earn a share of the income that these assets produce. This happens in the form of a dividend. And because of federal regulation regarding REITs, these companies tend to pay out a higher dividend (in terms of dividend yield) than other dividend stocks.

In this article, we’re going to explain the benefits of high dividend REITs for investors. This includes the dividend income that helps boost their total return. We’ll also explain why they are an ideal option for investors who are looking to invest in different asset classes.

When talking about the stock market, diversification is more than owning a basket of stocks, even if those stocks are part of a mutual fund or exchange-traded fund (ETF). Diversification is about owning multiple asset classes.

The “traditional” portfolio that many investors hear about is the 60/40 portfolio. This means investors should have a portfolio with an allocation of 60% towards stocks and 40% towards bonds. But today, investors also understand the importance of having exposure to other asset classes that include commodities (e.g. precious metals), real estate, and, for the most risk-tolerant investor there are cryptocurrencies.

Diversification also means diversification within asset classes. Having money in eight ETFs will not provide diversification if all the ETFs invest in essentially the same companies.

Investing in real estate is a reliable way to build wealth. But the vast majority of individual investors don’t have access to the capital to buy real estate. And if they plan to use their real estate holdings as rental properties, they will require some additional capital.

By investing in a REIT investors are not investing in physical real estate. Rather they are investing in companies that own real estate properties. Instead of collecting rent or interest from their properties, REIT investors get paid via a dividend.

And this dividend is, in fact, a guarantee. The rules that govern REITs mean that the company must payout a high percentage of their profits (usually at least 90%) as a dividend. That’s one reason why financial advisors recommend REITs to their income-oriented clients.

Although the obstacles to holding physical gold and silver are not as cost-prohibitive as that of owning real estate, a good way of thinking about REITs is the difference between owning physical gold and silver or investing in mining stocks. Both give investors the opportunity to invest in a specific asset class that helps provide real diversification.

A second benefit to owning high dividend REITs is a hedge against inflation. These stocks will tend to underperform the market in terms of capital gains. But the dividend will help to make up the difference in terms of total return.

A 2020 study by JPMorgan Chase showed that in the 20-year period from 2001-2020, the S&P 500 Index provided an average return of 7.5%. On the other hand, REITs provided an average return of 10%. Of course, there has to be some nuance applied to this statistic. Some S&P 500 outperformed the average and some REITs underperformed their average. But in general, this shows that investing in REITs has the potential to boost an investor’s total return.

That’s particularly significant in times of high inflation. For most of those 20 years, investors were not concerned with inflation that was higher than the Federal Reserve’s target rate of 2%. However, in 2022, inflation rose significantly beyond the Fed’s preferred rate. And that makes a guaranteed high yield dividend an attractive option for investors.

Investors can choose from a range of companies. In fact, MarketBeat provides subscribers with access to a frequently updated list of REITs that pay a high dividend. However, many individual investors don’t have the time or the inclination to pick their own stocks, particularly for an asset class that may make up only a small part of their portfolios.

An alternative is to invest in REIT ETFs. Investors may not capture the very highest dividend yield available. But leaving a few chips on the table is the trade-off with any ETF. What investors get is a smoothing effect with the peace of mind of an investment that historically tends to provide a Goldilocks (not too high, not too low) level of performance.  

There are over 200 REIT ETFs for investors to choose from. Many of these are becoming part of a 401(k) plan. But as with any investment, investors need to perform their own due diligence. Some things for investors to consider include:

What is the investment philosophy of the fund? A fund that is concentrated on specific niches of REITs may cause investors to take on too little or too much risk than is needed to match their investment goals.

Is the fund actively or passively managed? In an actively managed ETF, a dedicated portfolio manager buys and sells the REIT stocks that make up the composition of the fund.  In a passively managed ETF, the portfolio manager will seek to buy stocks that track closely with an index fund. For REITs one of the more closely followed indexes is the Financial Times Stock Exchange (FTSE) Nareit Index tracks the performance of the U.S. REIT Industry and the Global REIT market.

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