One of the attractions of real estate investment trusts (REITs) is that some pay exceptionally high dividends. How long this can continue – with the Fed about to raise interest rates – is another question, but, for now, it’s easy to find REITs paying 6%+ dividends.
Here are eight with enough average daily volume to qualify as liquid enough for large institutions to enter:
Simon Property Group Inc. (NYSE:SPG) pays a 7.03% dividend. The Indianapolis-based firm is a retail-oriented operation with properties in North America, Europe and Asia. Simon Property Group is a member of Standard & Poor’s 100. In June 2022, Jeffries’ analysts moved the REIT from “buy” to “hold” with a price target of $100.
Medical Properties Trust Inc. (NYSE:MPW) pays an 8.47% dividend. The healthcare facilities REIT just hit a new 2022 low – one of the reasons the yield looks so high. Headquartered in Birmingham, Alabama, Medical Properties Trust has been in the healthcare facilities business since 2003 and IPO’ed on the NYSE in 2005.
Omega Healthcare Investors Inc. (NYSE:OHI) is paying an 8.80% dividend. Based in Hunt Valley, Maryland, the REIT operates senior care centers, skilled nursing facilities and assisted living facilities in the United States and the United Kingdom.
Vornado Realty Trust (NYSE:VNO) pays an 8.06% dividend. The REIT owns, manages and develops office and retail assets, mostly in New York City. In May 2022, Piper Sandler downgraded the company from “neutral” to “underweight” with a price target reduction from $44 to $35.
Sabra Health Care REIT Inc. (NASDAQ:SBRA) pays an 8.83% dividend. It’s headquartered in Irvine, California, and operates skilled nursing, senior housing and specialty hospitals across the United States. In late June 2022, Jeffries reduced its “buy” rating to a “hold” and reduced its price target from $15 to $14.
SL Green Realty Corp. (NYSE:SLG) is paying a dividend of 8.14%. The company says it is New York City’s largest owner of office real estate, including properties at One Madison Avenue, 100 Church Street and 100 Park Avenue. In September 2022, Truist analysts increased their rating on the REIT from “hold” to “buy” with a $59 price target.
Uniti Group Inc. (NASDAQ:UNIT) pays a 6.94% dividend. This REIT is hitting a 2022 low for the year. The Little Rock, Arkansas-based company is a communications infrastructure operation providing fiber and other wireless solutions for clients.
Hudson Pacific Properties Inc. (NYSE:HPP) pays a dividend of 6.76%. This REIT hit lows for the year. The company owns and operates office and studio properties in the United States and in Canada. In early September 2022, Morgan Stanley upgraded Hudson Pacific Properties from “underweight” to “equal weight” with a price target of $13.
Be aware that REITs can raise or diminish dividend payouts whenever management feels it’s necessary – there’s no guarantee that the present level of payment will continue. If the value of underlying properties falls because of anti-inflation moves by the Fed, dividend cuts become more likely.
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Looking for high dividend yields without the price volatility?
Real estate is one of the most reliable sources of recurring passive income, but publicly-traded REITs are just one option for gaining access to this income-producing asset class. Check out Benzinga's coverage on private market real estate and find more ways to add cash flow to your portfolio without having to time the market or fall victim to wild price swings.
Not investment advice. For educational purposes only.