2020 REITs List: 167 Publicly-Traded REITs Sure Dividend

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2020 REITs List: 167 Publicly-Traded REITs


Updated on January 20th, 2020 by Samuel Smith

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 high 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:

 

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 10-ranked REITs today.

Table Of Contents

In addition to the full downloadable Excel spreadsheet, this article covers our top 10 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 10 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 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.

REIT Landing Page Excel Document 1

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.

REIT Landing Page Excel Document 2

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.

This trend is shown below.

REITs Persistently High Dividend Yields

Source: NAREIT: The Investor’s Guide to REITs

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-FFO reconciliation from a recent earnings release of Realty Income (O), one of the largest and most popular REIT securities.

Source: Realty Income Earnings Release

In this quarter, net income per unit was $0.39 per share while FFO per unit was $0.81, 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 10 REITs Today

Below we have ranked our top 10 REITs today, according to 5-year expected total annual returns in the Sure Analysis Research Database. Stocks are ranked in order of expected return, from lowest to highest.

Top REIT #10: Ventas REIT (VTR)

Ventas is one of the largest healthcare REITs in the U.S., with approximately 1,200 properties in the U.S., Canada and the United Kingdom and a market cap of $21.7 billion. Ventas benefits from a broadly diversified portfolio within the healthcare real estate space that allows it to allocate capital efficiently by harvesting capital from in-favor assets and redeploying it into out-of-favor assets. This approach has led to strong long-term outperformance for the company.

Source: Investor Presentation

Ventas reported its third quarter earnings results on October 25th. Same-store net operating income remained essentially flat while normalized funds from operations per share fell from $0.99 to $0.96. The poor performance was driven by a sharp 5.0% decline in net operating income of senior housing operating properties thanks to intense competition from new openings and disappointing demand growth. As a result of the lingering challenges in the Senior Housing market right now, Ventas has postponed its projected return to growth by at least one year.

While the negative outlook certainly warranted a pull-back from the company’s lofty valuation prior to releasing its Q3 results, we believe the stock has overreacted. With the stock having declined precipitously from the mid-$70s to the mid-$50s, shareholders are treated to a dividend yield that is pushing 6% backed by world-class management and assets, a sector-leading balance sheet, and a safe payout ratio.

We expect total annual returns of 7.0% per year through 2025, and view the REIT as a buy right now due to the relatively low risk profile associated with the attractive yield and solid total return potential. While the main risk remains the ongoing stagnate and even declining performance in the senior housing portfolio, the company’s balance sheet, track record, exceptional management team, and diversification should enable it to continue outperforming the market in the long run.

Top REIT #9: Ladder Capital Corp (LADR)

Ladder Capital Corp is a commercial real estate finance company structured as an internally managed REIT and originates and invests in a portfolio of commercial real estate and real estate-related assets, diversified by region and property type. The trust has over $6.6 billion worth of assets on its balance sheet and a market capitalization of $2.2 billion. Its assets include $3.4 billion of loans, $1.9 billion of securities and $1.2 billion of real estate.

The $3.4 billion loan portfolio is predominantly senior secured first mortgage loans. The securities portfolio is a source of stable recurring net interest income and is compromised mostly of CMBS bonds. The real estate portfolio is comprised of roughly 8.2 million square feet and is a source of stable recurring cash flows with potential NAV upside. It is financed with long-term, non-recourse, fixed-rate financing.

Loans are the largest component of Ladder Capital’s investment portfolio.

Source: Investor Presentation

Ladder Capital reported third-quarter financial results which included GAAP income before taxes for the quarter of $32.1 million compared to $84.7 million in the same period a year ago. Core earnings came in at $44.1 million, or $0.38 per share. On a year-over-year basis, core EPS was down 36%. Net interest income was down 21% from last year to $30.9 million. After-tax core return on average equity was 10.9%, down significantly from 17.1% last year.

Given that it had its IPO in late 2008 – in the midst of the financial crisis – it is hard to get an accurate picture of exactly how it can be expected to perform in the next recession. However, the mortgage backed security industry – given its leverage and interest rate sensitivity – is very prone to underperform when the housing market experiences a downturn and mortgage foreclosures rise. As a result, it should not be viewed as a safe defensive stock for a recession.

We expect annual returns of ~7.7% per year over the next five years thanks to its attractive and growing dividend offset by slight multiple compression. The biggest factors that will impact the total returns generated by Ladder Capital are the health of the mortgage market and the direction of interest rates.

If interest rates continue their recent fall towards zero and/or the mortgage market begins experiencing significant default rates, Ladder will almost certainly underperform. However, if interest rates rebound and the mortgage space stays steady, Ladder’s strong track record within the mortgage REIT sector will likely continue.

Top REIT #8: Federal Realty Investment Trust (FRT)

Federal Realty is a shopping center REIT similar to Brixmor Property Group. However, it concentrates in high-income, densely-populated coastal markets in the US, allowing it to charge more per square foot than its competition. Federal Realty trades with a market cap of $9.8 billion today on $950 million in annual revenue.

Its biggest claims to fame are its A-rated balance sheet (making it one of the most conservative investments in the REIT sector) and 52 straight years of growing its dividend (the longest streak among REITs) at a highly impressive CAGR of 7%.

Source: Investor Presentation

The trust reported third quarter results on October 30th. Same-store occupancy stood at 93.5%, down 90 basis points from the year-ago quarter. That being said, re-leasing spreads remain strong at 9.9% and same-store NOI grew by 2.1%. Adjusting for a buy-out charge, the trust’s FFO per share came in at $1.59.

Management has made a strategic decision to forego rent at several properties over the next year – causing them to likely experience flattish FFO performance over the next 12 months – by buying out and denying renewal to certain tenants in order to redevelop the properties and improve their long-term profitability. Given the REIT’s A-rated balance sheet, they can easily absorb the short-term hit to cash flows and long-term oriented investors will likely thank management later.

Federal Realty believes that its portfolio of flexible retail-based properties located in strategically selected major markets that are transit-oriented, first ring suburban locations will continue to thrive for the foreseeable future. This is because these markets’ superior income and population characteristics, significant barriers to entry, and strong demand characteristics will drive strong long-term rent growth. Furthermore, by keeping the portfolio at a manageable size and restrained to a limited number of core markets, management can give each asset the necessary focus to drive outperformance.

Thus far, the strategy has been working well, as Federal Realty’s $28.28 annualized base rent (ABR) per square foot, 10% rent growth on comparable leases, and 94% leased portfolio as of quarter end all imply a healthy and high quality portfolio.

Given the attractive long term prospects for the business and its strong management and balance sheet, we expect 9.9% annual returns going forward. While Federal Realty faces similar risks as Brixmor from grocer and ecommerce trends, we believe they are even more minimal in Federal Realty’s case given its more focused portfolio, stronger markets, and stronger balance sheet.

Top REIT #7: Brixmor Property Group (BRX)

Brixmor owns about 421 shopping centers which equate to roughly 73 million leasable square feet and are positioned in the top 50 metropolitan areas in the United States. The REIT’s three largest tenants (by annualized base rent) are TJX Companies Inc. (TJX), The Kroger Co. (KR), and The Dollar Tree Stores, Inc. (DLTR) with no tenant contributing more than 3.4% of annualized base rent, giving it a quality and well-diversified tenant mix.

With a market cap of $6.2 billion, Brixmor has been able to provide a steadily growing dividend per share that is currently annualized at $1.12. Management also points to a strong investment pipeline which is focused on investing in communities where it sees future growth and divesting in stagnant areas.

Source: Investor Presentation

The company’s main catalyst is its new management team which is investing heavily (over $1 billion organic investment pipeline) in its properties. As a result, it is bridging the previously large gap between its existing rents and market rents. With considerable room still to run, BRX can grow its cash flow fairly rapidly without having to acquire new properties. As a result, we believe the REIT is still materially undervalued and will generate total annual returns of 10.6% through 2025.

The main risk here is that cut-throat competition in the grocer space along with the continued advance of ecommerce will lead to continued defaults in BRX’s portfolio, straining its balance sheet and growth in the process. However, we believe that BRX’s heavy investments in its portfolio along with its aggressive efforts to cull non-core assets will enable it to more than offset any headwinds that may emerge from these trends.

Top REIT #6: EPR Properties (EPR)

EPR Properties is a specialty real estate investment trust, or REIT, that invests in properties in specific market segments that require industry knowledge to operate effectively. It selects properties it believes have strong return potential in Entertainment, Recreation, and Education.

Source: Investor Presentation

The REIT structures its investments as triple net, a structure that places the operating costs of the property on the tenants, not the REIT. The portfolio includes more than $5 billion in investments across 300+ locations in 41 states, including over 250 tenants. Total revenue is in excess of $600 million annually and the company’s market cap is $5.7 billion.

A competitive advantage for EPR relative to its fellow triple net lease REITs is that it targets niche markets and achieves a dominant scale. While it owns a decent-sized portfolio of charter schools and early childhood education centers, management has recently indicated its intent to move away from this business over the long term and instead focus primarily on entertainment and experience-oriented investments where it currently has over two decades of experience and has obtained a large portfolio of assets including indoor skydiving facilities, Top Golf ranges, ski slops, and movie theaters.

There is plenty of opportunity for EPR’s growth to continue in 2020 and beyond as the millennial generation is increasingly focused on experiences rather than accumulating things. The company has executed $685 million worth of property investments in 2019 through the third quarter and management is looking to redeploy the capital raised from its education asset dispositions as soon as possible. These investments will only further EPR’s economies of scale and network advantages in the entertainment and experiential space.

The most important catalyst for EPR’s future growth is a growing economy. Consumers tend to cut back spending on entertainment and other recreational activities during a recession. As long as the U.S. economy stays out of a downturn, the economic climate should remain supportive of growth for EPR. Furthermore, EPR’s assets are ecommerce resistant, eliminating a risk that faces many triple net REITs.

The main risk besides a severe recession is the fact that many of its properties are difficult to repurpose or redevelop if the main tenant goes out of business. While this is true and certainly poses a risk, EPR’s enormous diversification, high rent coverage, favorable lease terms, and conservative underwriting practices significantly mitigate this risk, making it not much riskier than its peers.

Given the recent sharp declines in the stock which have pushed the monthly dividend’s yield above 6%, we expect total annual returns of 11.7% through 2025.

Top REIT #5: Taubman Centers (TCO)

Taubman Centers is a retail REIT that acquires, develops, owns, and operates high-grade malls and shopping centers in the United States, Puerto Rico, China, and South Korea. Taubman Centers is focused on the upper end of the quality spectrum of US malls and shopping centers as it owns the most productive portfolio of malls in the United States and has a market cap of $2.8 billion.

Source: Earnings Slides

Taubman Centers reported its third quarter earnings results on October 29, revealing year-over-year revenue growth of 2.1% and FFO-per-share of $0.86, down from the previous year due to special one-time items. Most importantly, Taubman Centers’ core asset metrics remained strong: sales per square foot, average rents, and comparable center operating income were all up year-over-year.

Looking ahead, the main risks here remain the impact of ecommerce on traditional retailers, especially anchor department stores. The market is also concerned about Taubman’s high leverage and potential threats to the dividend. However, given their ability to recycle capital effectively, their very high quality assets, and minimal exposure to troubled tenants, Taubman should be able to pull through any short term choppiness just fine and generate attractive long-term total returns for patient investors.

Our current model estimates annualized total returns of 11.9%, driven primarily by Taubman’s high 8.5% dividend yield.

Top REIT #4: Simon Property Group (SPG)

Simon Property Group is a real estate investment trust (REIT) that was formed in 1993. The trust focuses on retail properties, mainly in the US, with the goal of being the premier destination for high-end retailers and their customers. The trust has interests in about 230 different properties that amount to nearly 200 million square feet of leasable space. Simon produces about $5.8 billion in annual revenue and has a market capitalization of $52 billion. The company has a diversified tenant portfolio.

Source: Earnings Slides

Simon reported third-quarter earnings on October 30th. Funds-from-operation (FFO) on a per-share basis came to $3.05, flat from the same quarter last year. Adjusting for expensing internal leasing costs of approximately $0.03 per diluted share in the year-ago period, FFO per diluted share increased 1.0%

Simon’s FFO history is quite good in that it saw only a minor dip in profitability during the Great Recession. Funds from operations have since more than doubled. Simon’s focus on high-end retailing has proven an immense source of strength in recent years and we see that steady performance continuing. In total, we see Simon producing a 3% average annual FFO growth rate moving forward.

Despite the broad pressures facing retail real estate, Simon is still the best retail REIT in the market by many metrics. Its occupancy rates remain extremely high, hovering around 96% in recent quarters. Simon’s competitive advantage is in its world-class portfolio of properties that allows it to charge industry-best leasing rates. Another advantage is its low cost of capital that comes from its A-rated balance sheet, enabling it to invest in ways that competitors cannot afford.

Simon has built a niche with high-end retailers over the years such that it has the most desirable spaces and developments, and thus sees a virtuous combination of high occupancy and leasing rates.

It is not immune to recession as it did cut its dividend during the last downturn. However, despite the cut, its overall business held up fairly well during that period and should be able to again. It is also one of the best positioned retail REITs to weather the impact of e-commerce on brick-and-mortar retail stores thanks to its exceptional management and A-rated balance sheet.

We expect total annual returns of 12.6% per year from Simon Property Group.

Top REIT #3: Macerich Company (MAC)

Macerich Company is one of the country’s leading owners, operators, and developers of major retail real estate. The company is incorporated as a real estate investment trust (REIT) and owns 51 million square feet of real estate consisting primarily of interests in 47 regional shopping centers. The company has a significant presence in the West Coast, Arizona, Chicago, and the Metro New York to Washington, DC corridor.

Macerich has a long history of steady growth:

Source: Investor Presentation

In the most recent quarter, Macerich reported funds from operations per share (FFOPS) of $0.88, down 11% from the same quarter last year.

Mall tenant annual sales per square foot increased 13.2% year-over-year, while re-leasing spreads (the difference between rent per square foot on a new lease compared to the rent that was previously paid for the same space) expanded by 8.3%. However, mall portfolio occupancy decreased, from 95.1% in last year’s quarter to 93.8%.

Macerich continues its efforts to redevelop the properties it has recaptured from Sears. While this process will eventually improve the cash flows of Macerich, it will continue to have a negative effect on the results of the REIT over the next several years.

Management reiterated its past guidance for funds from operations of $3.50-$3.58 for 2019. With an annualized dividend payout of $3.00 per share, Macerich is expected to generate more than enough FFO to maintain its dividend payout. That being said, the leverage has gotten a bit high, forcing management to consider selling assets, which could hurt long-term value for shareholders. Additionally, if another significant round of bankruptcies were to hit the retail industry, Macerich would likely have no choice but to cut its dividend.

That being said, its extremely high-quality properties located in densely populated markets give it enormous flexibility in redeveloping its vacant space into live-work-play city centers that will likely continue to thrive for decades to come. As a result, we have a lot of confidence in Macerich as one of our top REITs and expect long term annualized total returns of 14.7%.

Top REIT #2: Brookfield Property REIT (BPR)

Brookfield Property REIT (BPR) is a subsidiary of Brookfield Property Partners (BPY) and their parent company Brookfield Asset Management (BAM). BPR was created in July 2018 upon completion of the acquisition of U.S. mall owner General Growth Properties (GGP) for $9.35 billion. Shares are aligned with parent company BPY, which controls 82% of outstanding units and offers a matching dividend payment plus the opportunity to convert existing BPR shares into BPY shares on a 1 to 1 basis over the next 20 years.

With a market cap of $1.2 billion, the assets are primarily comprised of Class-A U.S. shopping malls. However, they operate under the umbrella of BPY, which owns and operates premium real estate holdings around the world including multifamily, office, retail, and industrial properties.

Source: Investor Presentation

BPR is managed by some of the best real estate managers in the world and operates under a unique business model that has them owning, operating, developing and recycling premium assets purchased on a value basis.

The combination of GGP’s asset base and Brookfield’s capital and development expertise has created a significant opportunity for BPR in the coming years. The company focuses on growth by developing opportunities within its existing footprint, including refurbishing or repositioning retail properties.

BPR targets 12-15% total returns for shareholders, and we believe the company is capable of meeting this objective over the next 5 years from a combination of a generous high yield of over 7% and targeted dividend growth of 5-8% per year.

Although the payout ratios have remained high in the 80-90% range historically, the actual payout ratios were 65% or lower since 2016, when accounting for asset sales, which imply a safer dividend than viewed on the surface. With the nature of their assets being premium real estate properties, we expect the stock to continue to generate stable cash flow and dividends even in the event of a recession as cash flows are tied to long-term leases in place with Class-A tenants.

The main risks here are the high leverage, international/currency exposure, and heavy focus on retail and office assets which are currently experiencing some headwinds. That being said, Brookfield is one of the best real estate managers in the world and management is heavily invested alongside shareholders, giving us confidence that they like their chances.

Given the steep ~40% discount to net asset value in the current market price, Brookfield Property REIT is a bargain for long-term investors seeking an attractive and growing income stream backed by an investment grade balance sheet, top-notch management, and world-class assets.

We expect 6% annual FFO growth, and the stock has a current dividend yield of 7%. Expansion of the valuation multiple could add another ~3% to annual returns, leading to total expected returns of 15% per year through 2025.

Top REIT #1: Tanger Factory Outlets (SKT)

Tanger operates, owns, or has an ownership stake in a portfolio of 40 shopping centers. Properties are located in Canada and 20 U.S. states, totaling approximately 14.4 million square feet, leased to over 500 different tenants.

Tanger’s diversified base of high-quality tenants has led to steady growth for many years.

Source: Earnings Slides

Tanger released 2019 third-quarter results on October 30th. Revenue of $119 million declined by 4%, while adjusted funds from operations (FFO) fell 7.9% year-over-year. Tanger’s occupancy rate stood at 95.9% in the most recent quarter, down only slightly from 96.0% in the previous quarter.

Occupancy is expected to decline somewhat in 2019 to a range of 95.5% to 95.8%, due to anticipated store closures by certain tenants. Fortunately, the company has maintained an occupancy rate of 95%+ for 25 consecutive years.

The dip in occupancy this year will negatively impact the company’s AFFO, but Tanger will still be able to cover its hefty dividend payment.

Tanger Factory carries significant risk due to the broad challenges facing its business model, as well as the risk of recession on retail properties. Its properties are not located in densely populated regions like its mall counterparts are. As a result, if their outlets fail to attract quality outlet-oriented tenants, they will likely struggle to find alternative uses that will maintain or grow their economic value.

This essentially means that the company’s entire long-term fortunes are tied to the outlet business model surviving the current upheaval in the retail space. Making matters worse, they face an avalanche of lease expirations over the next several years that will test the resilience of their business model.

That being said, Sure Dividend believes that its experienced and storied management team, low payout ratio, strong grade balance sheet, and lack of exposure to troubled department store anchors will enable it to weather the current storm and deliver strong total returns to patient long-term oriented investors.

Another positive note is that Tanger fared very well during the last recession. AFFO fell only 2.2% from 2008 to 2010. Outlet centers provide good value for the cost and so this industry should see similar or growing foot traffic and earnings when the population tightens their purse strings.

Given that the current valuation multiple is less than half its long-term average, if management can successfully return the company to growth and continue its dividend growth streak, investors face the prospect of considerable capital appreciation alongside the hefty 9%+ dividend yield. Given our bullish stance on the trust’s long-term prospects, we model an annualized total return of 16.6% over the next half decade.

Final Thoughts

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:

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 stock databases:

You might also be looking to create a highly customized dividend income stream to pay for life’s expenses.

The following two lists provide useful information on high dividend stocks and stocks that pay monthly dividends:

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