income-producing real estate. To qualify as a REIT, the trust must comply with IRS rules. These rules include: 1) distributing annually as dividends at least 90% of its taxable income, 2) investing at least 75% of its total assets in real estate and 3) deriving at least 75% of gross income from real estate.
The 90% distribution requirement along with no corporate income taxes are two reasons REITs yields are often above average. However, it is important to note that because REITs pay no income tax, their dividends are not eligible for the special treatment as a "qualified dividends", which are normally taxed at 15%.
When comparing REIT yields to investments with qualified dividends, you must always look at them on an after-tax basis. REITs trade on major stock exchanges and have become immensely popular since their introduction.
This week, I screened my dividend growth stocks database for REITs with a yield at or above 4% and have increased their dividends for at least 10 consecutive years. The results are presented below:
National Health Investors (NHI) is a real estate investment trust that invests in income-producing health care properties primarily in the long-term care industry.
Yield: 4.2% | Years of Dividend Growth: 12
National Retail Properties, Inc. (NNN) is an equity real estate investment trust that invests in high-quality, freestanding retail properties subject to long-term net leases with major retail tenants.
Yield: 4.3% | Years of Dividend Growth: 21
Universal Health Realty Income Trust (UHT) is a real estate investment trust (REIT) that invests in healthcare and human service related facilities.
Yield: 4.3% | Years of Dividend Growth: 26
Urstadt Biddle Properties (UBA) is a real estate investment trust that acquires, owns and manages commercial real estate properties primarily in the northeastern United States.
Yield: 4.6% | Years of Dividend Growth: 19
Senior Housing Properties Trust (SNH), a real estate investment trust (REIT), primarily invests in senior housing properties.
Yield: 5.7% | Years of Dividend Growth: 11
Omega Healthcare Investors Inc. (OHI) is a real estate investment trust (REIT) that invests in income-producing healthcare facilities, mainly long-term care facilities located in the United States.
Yield: 5.7% | Years of Dividend Growth: 11
As with past screens, the data presented above is in its raw form. Some of the the companies would be disqualified for poor dividend fundamentals. However some of the others may be worth additional due diligence.
My database, D4L-Data, is an Open Office spreadsheet containing more than 20 columns of information on the 220+ companies that I track. The data is sortable and has built-in buttons and macros to make it easy to use. Companies included in the list are those that have had a history of dividend growth. The D4L-Data spreadsheet is a part of D4L-Premium Services and is updated each Saturday for subscribers.
Full Disclosure: Long NNN, UHT, in my Dividend Growth Portfolio, and long NHI, UBA, SNH, OHI in my High Yield Portfolio. See a list of all my dividend growth holdings here.
- 6 Healthcare Dividend Stocks For A Healthy Portfolio
- 11 Low-Debt, Higher-Yielding Dividend Stocks
- 7 Small-Cap, High-Yield Dividend Stocks
- 10 High-Energy, High-Yield Dividend Stocks
- 12 Dividend Stocks For A Powerful Income Stream
Tags: [NHI] [NNN] [UHT] [UBA] [SNH] [OHI]
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