Look out below. You could be in for a major crash landing if you hold too many of today’s highest yielding REIT stocks. Right now this market pays out an extraordinary amount of yield. These REITs are strictly yield focused and pay out a large amount of earnings. This can be a dangerous combination for some investors. Sometimes just because a REIT has the highest yield doesn’t mean it’s safe. In fact it could be dangerous to your financial health. Some REITs are safer than others. I own 2 REITs at present with one up and the other way down. They are both high yielders with problems. Most are associated with Calgary and the plunge in oil prices. This will serve as a good real life example of what happens when you just chase yield like I did with these two purchases. Anyways let’s look at the Highest Dividend REIT Stocks -To Buy Now.
Dream REIT (D.UN) Yields 8.1% – Price now $18.63. My purchase price = $16.65
Total Gain 12%
Slate Office REIT (SOT.UN) Yields 9.6% – Price now $7.79 My purchase price = $8.83
Total Loss 7%
You can see just how intoxicating chasing high yield can be. Know the risks and stay informed on what’s happening with the company and what it owns and where it is. Almost a 10% yield on a REIT stock when all you get in most high yield savings accounts is 2%. In a lot of cases when the yield is high the price starts to erode like it did with my investment in Slate Office Reit. I’m holding for now but if it gets to the point of a 9% loss I’ll probably sell.
Other High Yielders – The Red Light Specials
Cominar REIT (CUF.UN) Yield = 9.9% Payout Ratio 93%
Artis REIT (AX.UN) Yield = 8.7% Payout Ratio (not available)
Dream Global REIT (DRG.UN) Yield = 8.6% Payout Ratio 58%
Northview Apartment REIT Yield = 8.4% Payout Ratio 160%
Crombie REIT (CRR.UN) Yield = 6.4% Payout Ratio 110.9%
H&R REIT (HR.U) Yield = 6.2% Payout Ratio 153%
Buy these particular securities at your own risk. These are 8 high yielding reit stocks that a lot of retail investors are chasing right now and even worse some retirees. You never want to put your retirement money at risk by getting into these types of stocks. I would just stay away but the point of this article was looking at the Highest Dividend REIT Stocks so here they are for you. Just because it’s a high yield does not make it a good investment. You should look for the best and for my money that lies with the green light specials I have listed below.
Safer REIT Stocks – The Green Light Specials
Granite REIT (GRT.UN) Yield = 5.4% Payout Ratio 49%
Riocan REIT (REI.UN) Yield = 5.2% Payout Ratio 60%
CDN Apartment Prop REIT (CAR.UN) Yield = 4% Payout Ratio 35%
CDN Real Estate Investment Trust (REF.UN) Yield = 4% Payout Ratio 42%
If I was going to purchase a REIT stock for my portfolio, I would choose from this list because of the low payout ratio and reasonable yields they have to offer. They are a safer place to invest because they pay a reasonable yield and don’t payout everything they earn so they have money left to invest into their business and continue to invest in real estate.
As I said earlier I don’t chase yield and neither do I hold a lot of REITs (only 2 at the moment) and I could hold less in the coming month. Always look for and buy the best. Please do your own due diligence by typing in the name of the REIT into your browser.
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