When an entire sector such as real estate investment trusts (REITs) gets trounced, a lot of decent stocks are thrown into the mix along with those that are not very good quality. Higher interest rates this year have slashed prices and subsequently raised the dividends on dozens of quality stocks, with some now beginning to show signs of life.
Here are three REITs with dividend yields over 6% that have been gaining momentum this week and could be signaling better times are ahead:
Simon Property Group Inc. (NYSE:SPG) is an Indianapolis-based retail REIT that owns and leases shopping malls, restaurants, outlet centers and entertainment venues. A member of the S&P 100, Simon Property Group is one of the largest shopping mall REITs in the U.S. and also owns properties in Europe and Asia.
Simon Property Group has had its share of difficulties over the past three years, including shutdowns from COVID-19 in 2020 and, more recently, threats from inflation and the possibility of a difficult recession on the horizon.
September was an extremely difficult month for most REIT stocks, and Simon Property Group’s stock fell to a recent low of $86.02 but has since bounced back to near $95. Its $7 annual dividend is now yielding 7.3%.
One thing to admire about Simon Property Group is its resiliency. In 2020, when COVID-19 triggered a huge price decline, the stock traded below $37. But within 2½ years it had risen to $160. Could history repeat itself?
Easterly Government Properties Inc. (NYSE:DEA) is an office REIT that acquires, develops and manages Class A commercial properties that are leased to government agencies through the General Services Administration. Easterly Government Properties owns a total of 95 properties across 26 states.
Easterly Government Properties stock has a 52-week range of $14.80 to $23.65. It pays an annual dividend of $1.06, and the recent yield was 6.7%.
Unless you believe that government agencies are going to default on paying their rent, it would seem that Easterly Government Properties is the proverbial “baby being thrown out with the bathwater.” The stock has seen more favorable comments from analysts lately, with two strong buy recommendations and has shown some upside over the past week. Further appreciation could be ahead.
Universal Health Realty Income Trust (NYSE:UHT) is a healthcare REIT that owns and operates healthcare facilities such as acute care and rehabilitation hospitals, medical office buildings, free-standing emergency rooms and childcare centers. Universal Health Realty Trust has 71 properties across 20 states. About 60% of its properties are medical buildings and clinics.
August and September were brutal months for Universal Health Realty Income Trust, with its stock losing about 25% of its value. However, the stock is up about 3% this week and looks to be bottoming in the low $40s. The $2.84 annual dividend yields 6.5%. The annual funds from operation (FFO) of $3.52 easily covers the dividend payout.
Another favorable sign is that Chairman Alan Miller recently purchased $68,000 worth of company stock at $48.90 per share. His decision indicates that better times could be ahead for Universal Health Realty Income Trust, and its recent price action would suggest the same.
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- Rentberry, the startup that is expected to disrupt the rental market, has now raised over $11.4 million through its current funding round on StartEngine. Rentberry shares are priced at $0.87 through its current offering.
- The CalTier Multi-Family Portfolio Fund recently completed a new investment in lakefront multifamily and mixed-use development. The CalTier Multi-Family Portfolio Fund is one of the few non-traded real estate funds available to non-accredited investors and has a minimum investment of $500. Year to date, the fund has produced an annualized cash-on-cash return of 7.02%.
