Updated on July 12th, 2021 by Bob Ciura
Spreadsheet data updated daily
Real estate investment trusts – or REITs, for short – can be fantastic securities for generating meaningful portfolio income. REITs widely offer higher dividend yields than the average stock.
While the S&P 500 Index on average yields less than 2% right now, it is relatively easy to find REITs with dividend yields of 5% or higher.
The following downloadable REIT list contains a comprehensive list of U.S. Real Estate Investment Trusts, along with metrics that matter including:
- Stock price
- Dividend yield
- Market capitalization
- 5-year beta
You can download your free 160+ REIT list (along with important financial metrics like dividend yields and payout ratios) by clicking on the link below:
In addition to the downloadable Excel sheet of all REITs, this article discusses why income investors should pay particularly close attention to this asset class. And, we also include our top 7 REITs today.
Table Of Contents
In addition to the full downloadable Excel spreadsheet, this article covers our top 7 REITs today, as ranked using expected total returns from The Sure Analysis Research Database.
The list is narrowed down further based on a qualitative assessment of business model strength, growth potential, and an analysis of debt levels. The top 7 list is ranked by 5-year expected total returns, in order of lowest to highest.
The table of contents below allows for easy navigation.
- How To Use The REIT List
- Why Invest In REITs?
- REIT Financial Metrics
- The Top 7 REITs Today
#7: Omega Healthcare Investors (OHI)
#6: Innovative Industrial Properties (IIPR)
#5: W.P. Carey (WPC)
#4: STAG Industrial (STAG)
#3: SL Green Realty (SLG)
#2: Essex Property Trust (ESS)
#1: Realty Income (O)
How To Use The REIT List To Find Dividend Stock Ideas
REITs give investors the ability to experience the economic benefits associated with real estate ownership without the hassle of being a landlord in the traditional sense.
Because of the monthly rental cashflows generated by REITs, these securities are well-suited to investors that aim to generate income from their investment portfolios. Accordingly, dividend yield will be the primary metric of interest for many REIT investors.
For those unfamiliar with Microsoft Excel, the following images show how to filter for REITs with dividend yields between 5% and 7% using the ‘filter’ function of Excel.
Step 1: Download the Complete REIT Excel Spreadsheet List at the link above.
Step 2: Click on the filter icon at the top of the ‘Dividend Yield’ column in the Complete REIT Excel Spreadsheet List.
Step 3: Use the filter functions ‘Greater Than or Equal To’ and ‘Less Than or Equal To’ along with the numbers 0.05 ad 0.07 to display REITs with dividend yields between 5% and 7%.
This will help to eliminate any REITs with exceptionally high (and perhaps unsustainable) dividend yields.
Also, click on ‘Descending’ at the top of the filter window to list the REITs with the highest dividend yields at the top of the spreadsheet.
Now that you have the tools to identify high-quality REITs, the next section will show some of the benefits of owning this asset class in a diversified investment portfolio.
Why Invest in REITs?
REITs are, by design, a fantastic asset class for investors looking to generate income. Thus, one of the primary benefits of investing in these securities is their high dividend yields.
The currently high dividend yields of REITs is not an isolated occurrence. In fact, this asset class has traded at a higher dividend yield than the S&P 500 for decades.
The high dividend yields of REITs are due to the regulatory implications of doing business as a real estate investment trust. In exchange for listing as a REIT, these trusts must pay out at least 90% of their net income as dividend payments to their unitholders (REITs trade as units, not shares).
Sometimes you will see a payout ratio of less than 90% for a REIT, and that is likely because they are using funds from operations, not net income, in the denominator for REIT payout ratios (more on that later).
One might think that the high payout ratios of REITs would result in inferior total return performance compared to their peers (even though they have high dividend yields).
This is not the case. According to MSCI, which compiles and tracks the index, the MSCI US REIT Index generated total annual returns of 10.6% per year since December 30, 1994. It outperformed the MSCI USA Investable Market Index (IMI), its parent index that tracks the large, mid and small cap segments of the USA market, by approximately 60 basis points per year in the same period.
REIT Financial Metrics
REITs run unique business models. More than the vast majority of other business types, they are primarily involved in the ownership of long-lived assets. From an accounting perspective, this means that REITs incur significant non-cash depreciation and amortization expenses.
How does this affect the bottom line of REITs?
Depreciation and amortization expenses reduce a company’s net income, which means that sometimes a REIT’s dividend will be higher than its net income, even though its dividends are safe based on its cash flow.
To give a better sense of financial performance and dividend safety, REITs eventually developed the financial metric funds from operations, or FFO. Just like earnings, FFO can be reported on a per-unit basis, giving FFO/unit – the rough equivalent of earnings-per-share for a REIT.
FFO is determined by taking net income and adding back various non-cash charges that are seen to artificially impair a REIT’s perceived ability to pay its dividend.
For an example of how FFO is calculated, consider the following net income-to-FFO reconciliation from Realty Income (O), one of the largest and most popular REIT securities.
Source: Realty Income Annual Report
In 2020, net income was $395 million while FFO available to stockholders was above $1.1 billion, a sizable difference between the two metrics. This shows the profound effect that depreciation and amortization can have on the GAAP financial performance of real estate investment trusts.
The Top 7 REITs Today
Below we have ranked our top 7 REITs today based on qualitative strength and total return potential. These stocks have positive expected rates of return over the next five years, and high dividend yields which make them appealing for income investors.
Added emphasis has been placed on dividend sustainability, which is even more important for investors to take into account during the coronavirus crisis, as it has had a particularly large impact on REITs. The stocks are listed in order of attractiveness based on a combination of qualitative and quantitative factors, such as future growth potential, current dividend yield, and dividend safety.
Top REIT #7: Omega Healthcare Investors (OHI)
- Dividend Yield: 7.1%
Omega Healthcare Investors is one of the premier skilled nursing focused healthcare REITs. It also generates about 20% of its annual revenue from senior housing developments. The company’s three main selling points are its financial, portfolio, and management strength. Specifically, Omega is the leader in Skilled Nursing Facilities.
Source: Investor Presentation
OHI recently reported first-quarter results which showed resilience in the face of the coronavirus pandemic. Adjusted FFO-per-share increased 7.6% year-over-year. Omega collected over 99% of contractual rent and mortgage payments in the quarter.
The portfolio benefits from a favorable near-term supply and demand outlook. It also has no material upcoming lease expirations or lease renewal risk and enjoys strong geographic and operator diversification (71 operators across 40 states plus the United Kingdom). Omega also has an investment-grade credit rating of BBB-.
Acquisitions will help accelerate the company’s growth. For example, Omega invested $595 million in acquisitions in the 2021 first quarter.
While uncertainties over the future of the healthcare system in the United States remain and some of its tenants are not financially strong, the company’s exposure to a growing segment of healthcare combined with a high dividend yield, make the stock a recession-resistant buy.
Top REIT #6: Innovative Industrial Properties (IIPR)
- Dividend Yield: 2.7%
Innovative Industrial Properties, Inc. is a single-use “specialty REIT” that exclusively focuses on owning properties used for the cultivation and production of marijuana. Because the industry is in the midst of a legal transition, there are constraints on capital available to businesses engaged in the marijuana business.
As of July 6th, Innovative Industrial Properties owned 72 properties in 18 states, representing approximately 6.6 million rentable square feet, which were 100% leased with a weighted-average remaining lease term of over 16 years.
Having the fortunate status as the only publicly traded marijuana REIT in the US has led to stunning returns, and growth.
Source: Investor Presentation
Revenue more than doubled in the 2021 first quarter, compared with the same quarter last year. Adjusted funds from operation (AFFO) increased 31.2% year-over-year.
IIPR’s growth has translated into higher dividends as well. In 2020, IIPR declared dividends totaling $4.47 per share, a 58% increase from 2019. The company again increased its dividend on March 15th by 6.5%. IIPR has a 2.7% yield right now.
IIPR is a high-risk, high-reward REIT due to the volatility and early stage of the marijuana industry. But the growth potential is noteworthy, which could greatly reward shareholders over the long-term. IIPR is definitely geared toward REIT investors looking more for growth than stability, and investors should closely monitor the company’s financial reports moving forward.
Top REIT #5: W.P. Carey (WPC)
- Dividend Yield: 5.3%
W.P. Carey is a commercial real estate focused REIT that operates two segments: real estate ownership and investment management. The REIT operates more than 1,200 single tenant properties on a net lease basis, across the US and Northern and Western Europe. Its asset management business has AUM of approximately $2.8 billion.
W.P. Carey has a highly diversified real estate property portfolio across multiple various industry groups.
Source: Investor Presentation
In the 2021 first quarter, revenue increased 0.7% year-over-year to $311.2 million. Portfolio occupancy was 98.3%. AFFO for the 2021 first quarter was $1.22 per diluted share, down 2.4% year-over-year. W.P. Carey also updated its full-year guidance, and now expects AFFO between $4.87 and $4.97 per diluted share. We expect 3.5% annual FFO-per-share growth going forward.
W. P. Carey generated FFO-per-share growth at a rate of 6% annually between 2009 and 2019, which was a very solid growth rate for a real estate investment trust. The growth rate has slowed down over the years, as W. P. Carey’s FFO-per-share growth rate has averaged just 3% between 2014 and 2018. Still, this is a decent growth rate, and we expect a similar growth rate of 3%-4% annually going forward.
Growth is fueled by investments in new properties. Since 2012, the REIT invested more than $10 billion into new assets by either purchasing entire REITs or through single-asset/portfolio purchases. Plus, due to the defensive nature of its business and a strong performance during past recessions, we believe that W.P. Carey will navigate the coronavirus crisis.
W.P. Carey has an investment grade credit rating of BBB from Standard & Poor’s. It has a fairly low level of maturities ($768 million) through 2022. It also has a long history of stable dividend growth, having increased its dividend every year since 1998.
Top REIT #4: STAG Industrial, Inc. (STAG)
- Dividend Yield: 3.7%
STAG Industrial is the only pure-play industrial REIT active across the entire domestic industrial real estate market. It is focused on single-tenant industrial properties and has ~450 buildings across 38 states in the United States.
As per the latest data, 55% of the tenants are publicly rated and 33% of the tenants are rated “investment grade.” The company typically does business with established tenants to reduce risk. It also pursues broad geographic and tenant diversification to further reduce risk.
STAG has an added advantage due to the company’s exposure to e-commerce properties, which gives it access to a key growth segment in real estate.
Source: Investor Presentation
In the 2021 first quarter, STAG grew core FFO-per-share by 4.3% year-over-year. Core FFO of $79.8 million for the first quarter of 2021 increased 13% from 70.6 million in the year-ago quarter.
STAG Industrial is facing a headwind due to the recession caused by the pandemic. However, the effect of the pandemic on the REIT has been limited so far thanks to the high credit profile of its tenants. It is remarkable that the REIT collected 99.6% of its base rental billings in 2020.
The coronavirus has hurt shipping and by extension the industrial REIT sector. Furthermore, the industrial sector is typically fairly cyclical and therefore suffers during recessions. However, STAG invests in capital projects that enable it to continue growing the portfolio, and its cash flow, regardless of market conditions. Furthermore, it only owns ~0.5% of the assets in its target universe, giving it an enormous growth runway.
The company recently notified investors that tenants that have requested rent relief equal to just ~1% of annual base rent, a promising figure that indicates STAG is holding up relatively well during the coronavirus crisis. The company has also paused acquisitions to preserve cash in this uncertain environment.
So far, STAG’s key financial metrics are holding up well. High occupancy and rent collection bodes well for the sustainability of the company’s dividend payout. STAG has an attractive 3.7% yield.
Top REIT #3: SL Green Realty (SLG)
- Dividend Yield: 4.5%
SL Green is an integrated REIT that is focused on acquiring, managing, and maximizing the value of Manhattan commercial properties. It is Manhattan’s largest office landlord, and currently owns 84 buildings totaling 38 million square feet.
Source: Investor Presentation
In late April, SLG reported (4/21/2021) financial results for the first quarter of fiscal 2021. Its same-store net operating income decreased -1.4% over the prior year’s quarter but its occupancy rate improved from 93.4% at the end of the previous quarter to 94.2%. Its funds from operations (FFO) per share decreased -17% over the prior year’s quarter, from $2.08 to $1.73, primarily due to asset divestments.
SLG has been significantly affected by the coronavirus crisis, which has caused a recession and thus has hurt several companies that are tenants of SLG. However, SLG benefits from reliable growth in rental rates in one of the most popular commercial areas in the world, Manhattan. The REIT pursues growth by acquiring attractive properties and raising rental rates in its existing properties. It also signs multi-year contracts (7-15 years) with its tenants in order to secure reliable cash flows.
Due to the effect of the pandemic on its business, funds from operations have stumbled this year but they have remained fairly resilient. We expect SLG to grow its funds from operations per share at a 3.0% average annual rate over the next five years.
Thanks to its financial strength, the REIT can endure the ongoing crisis and emerge stronger whenever the pandemic subsides. It can also maintain its dividend, which is well-covered with a healthy payout ratio of 56% expected for 2021.
Top REIT #2: Essex Property Trust (ESS)
- Dividend Yield: 2.6%
Essex Property Trust invests in west coast multi-family residential proprieties where it engages in development, redevelopment, management and acquisition of apartment communities and a few other select properties.
Approximately 83% of Essex’s net operating income is derived from California, with the remaining 17% from Seattle. Essex has ownership interests in 246 apartment communities consisting of over 60,000 apartment homes.
Source: Investor Presentation
On April 27th, 2021 Essex reported first quarter results. Core FFO–per–diluted share declined by 12% to $3.07 during Q1. Same–property gross revenue fell by 8.1% and same–property net operating income fell by 12.3% from Q1 2020. Three apartment communities were sold during the quarter for a contract price of $275.5 million. The company also issued $450 million of 7–year senior unsecured notes due in 2028. Meanwhile, Essex reaffirmed its full–year guidance for core FFO per share guidance in a range of $11.86 to $12.46.
We expect ~4% annual FFO-per-share growth over the next five years. Growth will come from the favorable economics of Essex’s geographic focus. The U.S. West Coast has high economic output (California and Washington combined would have the 5th-highest GDP in the world) as well as limited supply.
Essex Property Trust has achieved impressive growth for several decades, on the back of the strong west coast property market. We expect Essex to bounce back quickly due to the premier locations in which it owns properties. A strong balance sheet also helps the company reach its growth objectives. The trust has a solid BBB+ credit rating which is high for a REIT.
The stock has a 2.6% dividend yield, and the company has increased its dividend for 27 consecutive years, placing it on the exclusive list of Dividend Aristocrats. Its most recent dividend increase was a 0.6% raise in February 2021.
Therefore, Essex earns a high place on the list due to its long dividend history of annual increases, and growth potential. It also has a very high level of dividend safety.
Top REIT #1: Realty Income (O)
- Dividend Yield: 4.1%
Realty Income is a retail-focused REIT that owns more than 6,500 properties. Realty Income owns retail properties that are not part of a wider retail development (such as a mall), but instead are standalone properties. This means that the properties are viable for many different tenants, including government services, healthcare services, and entertainment.
Realty Income is a large-cap stock with a market capitalization above $24 billion.
The company’s long history of dividend payments and increases is due to its high-quality business model and diversified property portfolio.
Source: Investor Presentation
In the most recent quarter, Realty Income beat analyst estimates on both revenue and FFO-per-share. Revenue increased 6.8% from the same quarter last year, due to property acquisitions and rent increases. Adjusted FFO-per-share declined 2.2% due to a higher share count.
Future growth remains likely, as the company’s acquisition pipeline is robust. Last quarter, Realty Income invested $1.03 billion in properties and properties under development or expansion, including $403 million in U.K. properties.
Realty Income leaps to the top spot on the list, because of its highly impressive dividend history, which is unmatched among the other monthly dividend stocks. Realty Income has declared over 600 consecutive monthly dividend payments without interruption, and has increased its dividend over 100 times since its initial public offering in 1994. Like Essex, Realty Income is a member of the Dividend Aristocrats.
In December, Realty Income raised its dividend by 0.2%, bringing the total dividend growth rate to ~3% for 2020. The company’s long history of dividend payments and increases is due to its high-quality business model and diversified property portfolio. These qualities make it the most attractive REIT for investors looking for a combination of dividend yield, dividend growth, and dividend safety.
The Complete REIT Spreadsheet List contains a list of all publicly-traded Real Estate Investment Trusts.
Bonus: Listen to our interview with Brad Thomas on The Sure Investing Podcast about intelligent REIT investing in the below video.
However, this database is certainly not the only place to find high-quality dividend stocks trading at fair or better prices.
In fact, one of the best methods to find high-quality dividend stocks is looking for stocks with long histories of steadily rising dividend payments. Companies that have increased their payouts through many market cycles are highly likely to continue doing so for a long time to come.
You can see more high-quality dividend stocks in the following Sure Dividend databases, each based on long streaks of steadily rising dividend payments:
- Dividend Kings List: Dividend Stocks With 50+ Years of Rising Dividends
- Dividend Aristocrats List: 25+ Years of Rising Dividends
- Dividend Champions List: 25+ years of rising dividends, that do not qualify as Dividend Aristocrats
- Dividend Achievers List: 10+ years of dividend increases
Alternatively, another great place to look for high-quality business is inside the portfolios of highly successful investors. By analyzing the portfolios of legendary investors running multi-billion dollar investment portfolios, we are able to indirectly benefit from their million-dollar research budgets and personal investing expertise.
To that end, Sure Dividend has created the following two articles:
You might also be looking to create a highly customized dividend income stream to pay for life’s expenses.
The following lists provide useful information on high dividend stocks and stocks that pay monthly dividends:
- The Best High Dividend Stocks: 200+ Companies With 5%+ Dividend Yields
- The Best Monthly Dividend Stocks: All 58 Stocks That Pay Monthly Dividends
- The Complete MLP List: 115 High-Yield, Tax-Advantaged Securities