Updated on April 5th, 2024 by Bob Ciura
Investors looking to generate higher income levels from their investment portfolios should look at Real Estate Investment Trusts or REITs. These are companies that own real estate properties and lease them to tenants or invest in real estate backed loans, both of which generate a steady stream of income.
The bulk of their income is then passed on to shareholders through dividends. You can see all 200+ REITs here.
You can download our full list of REITs, along with important metrics such as dividend yields and market capitalizations, by clicking on the link below:
The beauty of REITs for income investors is that they are required to distribute 90% of their taxable income to shareholders annually in the form of dividends. In return, REITs typically do not pay corporate taxes.
As a result, many of the 200+ REITs we track offer high dividend yields of 5%+.
But not all high-yielding stocks are automatic buys. Investors should carefully assess the fundamentals to ensure that high yields are sustainable.
Note that while the securities in this article have very high yields, a high yield alone does not make for a solid investment. Dividend safety, valuation, management, balance sheet health, and growth are also very important factors.
We urge investors to use the analysis below as informative but to do significant due diligence before buying into any security – especially high-yield securities. Many (but not all) high-yield securities have a significant risk of a dividend reduction and/or deteriorating business results.
Table of Contents
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- High-Yield REIT No. 10: Brandywine Realty Trust (BDN)
- High-Yield REIT No. 9: Ellington Financial (EFC)
- High-Yield REIT No. 8: Ares Commercial Real Estate (ACRE)
- High-Yield REIT No. 7: Medical Properties Trust (MPW)
- High-Yield REIT No. 6: Ellington Residential Mortgage REIT (EARN)
- High-Yield REIT No. 5: Two Harbors Investment Corp. (TWO)
- High-Yield REIT No. 4: AGNC Investment Corp. (AGNC)
- High-Yield REIT No. 3: ARMOUR Residential REIT (ARR)
- High-Yield REIT No. 2: Orchid Island Capital (ORC)
- High-Yield REIT No. 1: Global Net Lease (GNL)
High-Yield REIT No. 10: Brandywine Realty Trust (BDN)
- Dividend Yield: 13.8%
Brandywine Realty owns, develops, leases and manages an urban town center and transit-oriented portfolio which includes 163 properties in Philadelphia, Austin and Washington, D.C. The REIT has a market capitalization of $1.1 billion and generates 74% of its operating income in Philadelphia, 22% of its operating income in Austin and the remaining 4% in Washington, D.C.
In early February, Brandywine Realty Trust reported (2/1/24) financial results for the fourth quarter of fiscal 2023. Its occupancy fell sequentially from 88.3% to 88.0% and its funds from operations (FFO) per share fell -7%, from $0.29 to $0.27. It was the fifth consecutive quarter in which the impact of high interest rates on interest expense was evident. Interest expense grew 27% year-over-year.
Click here to download our most recent Sure Analysis report on BDN (preview of page 1 of 3 shown below):
High-Yield REIT No. 9: Ellington Financial (EFC)
- Dividend Yield: 13.8%
Ellington Financial Inc. acquires and manages mortgage, consumer, corporate, and other related financial assets in the United States. The company acquires and manages residential mortgage–backed securities (RMBS) backed by prime jumbo, Alt–A, manufactured housing, and subprime residential mortgage loans.
On February 27th, 2024, Ellington Financial reported its Q4 results for the period ending December 31st, 2023. Due to the company’s business model, Ellington doesn’t report any revenues. Instead, it records only income. For the quarter, gross interest income came in at $98.7 million, up 2.6% quarter-over-quarter.
Ellington’s strong numbers from its residential transition loan portfolio and its Agency and non-agency MBS didn’t offset dilution and expenses related to the merger with Arlington Asset and net losses from Longbridge and other positions, leading to a small negative economic return overall for the quarter.
Click here to download our most recent Sure Analysis report on Ellington Financial (EFC) (preview of page 1 of 3 shown below):
High-Yield REIT No. 8: Ares Commercial Real Estate (ACRE)
- Dividend Yield: 13.9%
Ares Commercial Real Estate Corporation is a specialty finance company primarily engaged in originating and investing in commercial real estate (“CRE”) loans and related investments. ACRE generated around $198.6 million in interest income last year.
The company’s loan portfolio (98% of which are senior loans) comprises 47 market loans across 8 asset types, with an outstanding principal balance of $2.2 billion. The majority of the loans are tied to multifamily, office, and mixed-use properties. In terms of geographical diversification, ACRE’s exposure features a healthy mix between the Southeast, West, and Midwest.
On February 22nd, 2024, ACRE reported its Q4 and full-year results for the period ending December 31st, 2023. Interest income came in at $44.2 million, 16% lower year-over-year. The decline was due to the company’s loans struggling to perform as higher rates of inflation and certain cultural shifts such as work-from-home trends continue to impact the operating performance and the economic values of commercial real estate.
Click here to download our most recent Sure Analysis report on ACRE (preview of page 1 of 3 shown below):
High-Yield REIT No. 7: Medical Properties Trust (MPW)
- Dividend Yield: 14.2%
Medical Properties Trust is the only pure-play hospital REIT today. It owns a portfolio of over 400 properties which are leased to over 30 different operators. The great majority of the assets are general acute care hospitals, but show some diversification into other specialty hospitals, including inpatient rehabilitation and long-term acute care. The portfolio of assets is also well diversified across different geographies with properties in 29 states to mitigate the risk of demand and supply imbalances in individual markets.
On February 21st, Medical Properties released its Q4 results. In the fourth quarter of 2023, Medical Properties Trust reported a net loss of ($1.11) and Normalized Funds from Operations (NFFO) of $0.36 per share. For the full-year 2023, the company recorded a net loss of ($0.93) and NFFO of $1.59 per share. Notably, these figures include approximately $0.12 per share of revenue from Steward Health Care System (Steward) recognized before transitioning to cash basis accounting as of January 1, 2024.
Click here to download our most recent Sure Analysis report on MPW (preview of page 1 of 3 shown below):
High-Yield REIT No. 6: Ellington Residential Mortgage REIT (EARN)
- Dividend Yield: 14.3%
Ellington Residential Mortgage REIT acquires, invests in, and manages residential mortgage and real estate related assets. Ellington focuses primarily on residential mortgage-backed securities, specifically those backed by a U.S. Government agency or U.S. government–sponsored enterprise.
Agency MBS are created and backed by government agencies or enterprises, while non-agency MBS are not guaranteed by the government.
On March 6th, 2024, Ellington Residential reported its fourth quarter results for the period ending December 31st, 2023. The company generated net income of $12.4 million, or $0.75 per share. Ellington achieved adjusted distributable earnings of $4.6 million in the quarter, leading to adjusted earnings of $0.27 per share, which covered the dividend paid in the period.
Click here to download our most recent Sure Analysis report on EARN (preview of page 1 of 3 shown below):
High-Yield REIT No. 5: Two Harbors Investment Corp. (TWO)
- Dividend Yield: 14.5%
Two Harbors Investment Corp. is a residential mortgage real estate investment trust (mREIT). As such, it focuses on residential mortgage-backed securities (RMBS), residential mortgage loans, mortgage servicing rights, and commercial real estate. The trust derives nearly all of its revenue in the form of interest through available-for-sale securities.
Two Harbors Investment Corp. released its financial results for the fourth quarter of 2023 on January 29, 2024. The period was marked by volatility in the mortgage market, with mortgage spreads and implied volatility remaining positively correlated to interest rates. The company reported a comprehensive income of $38.9 million, equating to $0.40 per weighted average share. This performance reflected a significant reversal from the previous quarter’s comprehensive loss of $56.8 million, or $0.61 per weighted average share.
The book value per share stood at $15.21 at the end of December 2023, slightly down from $15.36 at the end of the previous quarter, indicating a modest economic return on book value of 2.0% for the quarter.
Click here to download our most recent Sure Analysis report on TWO (preview of page 1 of 3 shown below):
High-Yield REIT No. 4: AGNC Investment Corp. (AGNC)
- Dividend Yield: 14.9%
American Capital Agency Corp is a mortgage real estate investment trust that invests primarily in agency mortgage–backed securities (or MBS) on a leveraged basis.
The firm’s asset portfolio is comprised of residential mortgage pass–through securities, collateralized mortgage obligations (or CMO), and non–agency MBS. Many of these are guaranteed by government–sponsored enterprises.
AGNC Investment Corp. announced its fourth quarter 2023 financial results on January 22, 2024, reporting a comprehensive income of $1.00 per common share, including $0.57 net income and $0.43 other comprehensive income per share.
The quarter saw a $0.60 net spread and dollar roll income per common share and ended with a tangible net book value of $8.70 per share. The quarter’s dividends were declared at $0.36 per share, contributing to a 12.1% economic return on tangible common equity. The investment portfolio was valued at $60.2 billion, with a leverage of 7.0x tangible net book value.
Click here to download our most recent Sure Analysis report on AGNC Investment Corp (AGNC) (preview of page 1 of 3 shown below):
High-Yield REIT No. 3: ARMOUR Residential REIT (ARR)
- Dividend Yield: 14.9%
As an mREIT, ARMOUR Residential invests in residential mortgage-backed securities that include U.S. Government-sponsored entities (GSE) such as Fannie Mae and Freddie Mac. It also includes Ginnie Mae, the Government National Mortgage Administration’s issued or guaranteed securities backed by fixed-rate, hybrid adjustable-rate, and adjustable-rate home loans.
Unsecured notes and bonds issued by the GSE and the US Treasury, money market instruments, and non-GSE or government agency-backed securities are examples of other types of investments.
On February 14, 2024, ARMOUR Residential REIT, Inc. (ARR) announced its Q4 2023. In the fourth quarter of 2023, ARMOUR reported income attributable to common stockholders amounting to $96.6 million, translating to $1.96 per common share, alongside net interest income of $5.8 million. Distributable Earnings available to common stockholders reached $52.4 million, equating to $1.07 per common share.
Click here to download our most recent Sure Analysis report on ARMOUR Residential REIT Inc (ARR) (preview of page 1 of 3 shown below):
High-Yield REIT No. 2: Orchid Island Capital Inc (ORC)
- Dividend Yield: 16.6%
Orchid Island Capital, Inc. is an mortgage REIT that is externally managed by Bimini Advisors LLC and focuses on investing in residential mortgage-backed securities (RMBS), including pass-through and structured agency RMBSs. These financial instruments generate cash flow based on residential loans such as mortgages, subprime, and home-equity loans.
On February 2, 2024, Orchid Island Capital disclosed its financial outcomes for the fourth quarter of 2023 amidst a turbulent market environment. The company reported a net income of $0.52 per share and observed a 2% increase in its book value, reaching $9.10.
Additionally, a dividend of $0.36 per share was declared and paid, reflecting a total return of 6.05% for the quarter. Orchid Island Capital undertook strategic adjustments to its investment portfolio during this period.
Click here to download our most recent Sure Analysis report on Orchid Island Capital, Inc. (ORC) (preview of page 1 of 3 shown below):
High-Yield REIT No. 1: Global Net Lease (GNL)
- Dividend Yield: 19.1%
Global Net Lease invests in commercial properties in the U.S. and Europe with an emphasis on sale-leaseback transactions. GNL’s portfolio includes over 1300 properties, spanning nearly 67 million square feet with a gross asset value of $9.2 billion.
The portfolio is over 96% leased with a weightedaverage remaining lease term of 6.9 years. Geographically, 81% of the straight-line rent is from North America, and 19% from Europe. The portfolio features an average annual rental increase of 1.3%, with 58% of tenants having an investment grade or implied investment grade credit rating.
Global Net Lease reported its fourth-quarter earnings for 2023 on February 27, 2024. In the fourth quarter of 2023, Global Net Lease experienced significant milestones and operational achievements. Despite challenges, the company reported robust financial metrics, including revenue of $206.7 million and net loss of $59.5 million, or $0.26 per diluted share.
Notably, net operating income (NOI) reached $169.7 million, while Core Funds from Operations (FFO) amounted to $48.3 million, or $0.21 per diluted share, and Adjusted Funds from Operations (AFFO) totaled $71.7 million, or $0.313 per diluted share.
Click here to download our most recent Sure Analysis report on Global Net Lease (GNL) (preview of page 1 of 3 shown below):
Final Thoughts
REITs have significant appeal for income investors due to their high yields. These 10 extremely high-yielding REITs are especially attractive on the surface, although investors should be aware that abnormally high yields are often accompanied by elevated risks.
If you are interested in finding high-quality dividend growth stocks and/or other high-yield securities and income securities, the following Sure Dividend resources will be useful:
High-Yield Individual Security Research
- 20 Highest-Yielding BDCs
- 20 Highest-Yielding MLPs
- 20 Highest Yielding Dividend Kings
- 9 Highest Yielding Royalty Trusts
Other Sure Dividend Resources
- Dividend Kings: 50+ years of rising dividends
- Dividend Aristocrats: 25+ years of rising dividends and in the S&P 500
- Monthly Dividend Stocks: Individual securities that pay out every month