May 1, 2018

6 High-Quality REITs Yielding Over 6%


One of the great things about being a value investor is that you can gain an edge over the market timers or the Index fund buyers. By paying close attention to profit margins, a value investor can seek to avoid painful losses by focusing on high-quality companies that have a strong record of dividend growth.

Most REITs have become cheaper year-to-date as a result of the fear of rising rates. There is no doubt that they (REITs and Rates) are correlated, but the reality is that REITs thrive in an environment when rates are modestly increasing.

By extension, some of the most attractive buying opportunities in REITs have resulted when investors erroneously drove down REIT share prices because of rate increases.




More importantly, investors shouldn’t simply go out and load up the truck on REITs that offer high-dividend yields. You must first consider the safety of the dividend the ability for the dividend to grow , and the overall merit of the REIT itself. As Benjamin Graham explained (The Intelligent Investor),

    “The defensive investor must confine himself to the shares of important companies with a long record of profitable operations and in strong financial condition.”



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