If you’re looking for dividend income from your investments, don’t overlook real estate investment trusts. REITs are companies that typically own real estate investments that produce income, such as shopping centers, apartment buildings and industrial parks. Some REITs invest in residential or commercial mortgages and related assets. Investing in a REIT lets you own real estate without having to purchase and maintain properties yourself.
REITs often pay dividends, sometimes significant ones. This is a benefit for investors who are looking for income from their investments, in addition to price appreciation. A properly managed REIT portfolio can provide an ongoing stream of income.
Which REITs Pay High Dividends?
Here are some high-dividend REITs that are worth considering in 2022:
- PennyMac Mortgage Investment Trust
- Armour Residential REIT Inc.
- Apollo Commercial Real Estate Finance Inc.
- Chimera Investment Corp.
- Medical Properties Trust Inc.
- Office Properties Income Trust
- VICI Properties Inc.
- Gaming and Leisure Properties Inc.
Mortgage REITs invest in residential and/or commercial mortgages and, in some cases, mortgage-backed securities. They rarely, if ever, own or manage property themselves.
PennyMac Mortgage Investment Trust
PennyMac Mortgage Investment Trust (NYSE: PMT) invests in residential mortgages, mortgage servicing rights, mortgage-backed securities, and hedge investments that relate to these. The company works with prime credit quality loans that are newly originated.
PennyMac has a forward dividend of $1.88, with a yield of 16.29%. The stock closed at $12.65 on Oct. 25 and has traded between $10.78 and $20.49 over the past 52 weeks.
Armour Residential REIT Inc.
Armour Residential REIT Inc. (NYSE: ARR) invests in residential mortgage-backed securities that are issued or guaranteed by Fannie Mae or Freddie Mac or are guaranteed by Ginnie Mae.
Armour Residential REIT has a forward dividend of $1.20, yielding an eye-popping 25.21%. That said, it closed at $4.96 on Oct. 25, near the low end of its 52-week range of $4.38 to $10.91.
Apollo Commercial Real Estate Finance Inc.
Apollo Commercial Real Estate Finance Inc. (NYSE: ARI) originates and invests in mortgages, mezzanine loans and other debt investments related to commercial real estate. Its portfolio has an amortized cost of $8.7 billion as of Sept. 30.
Apollo Commercial Real Estate Finance has an impressive 14.74% forward yield, based on a $1.40 forward dividend. The stock has traded between $7.91 and $15.76 over the past 52 weeks, closing at $11.25 on Oct. 25.
Chimera Investment Corp.
Chimera Investment Corp. (NYSE: CIM) invests in residential mortgage loans, residential mortgage-backed securities and commercial mortgage-backed securities. The company has $14 billion in assets.
Closing at just $6.42 per share on Oct. 25, Chimera Investment Corp. stock has a 52-week range of $4.91 to $16.85. Its forward dividend is $0.92, yielding 15.59%.
Some REITs specialize in commercial properties, such as shopping malls, industrial parks or hospitals.
Medical Properties Trust Inc.
As its name would imply, Medical Properties Trust Inc. (NYSE: MPW) owns hospitals. In fact, it is the second-largest nongovernment owner of hospitals in the world. Over half (61%) of its properties are in the United States, and most of the rest are in Europe. The company has $22.3 billion in assets.
On Oct. 25, Medical Properties Trust closed at $10.84 per share. Its 52-week range is $9.90-$24.13 per share. The company has a forward dividend of $1.16, which translates to a yield of 11.35%.
Office Properties Income Trust
Office Properties Income Trust (Nasdaq: OPI) owns, operates and leases buildings to commercial tenants. It has 172 properties in its portfolio, most of which are occupied by a single tenant. These properties total over 22 million square feet of space and are located in 32 states and Washington, D.C.
Office Properties Income Trust closed at $15.01 on Oct. 25 and has a 52-week range of $12.17-$28.25. Its 15.11% forward yield is generated by its $2.20 forward dividend.
Casinos are a popular investment for REITs, and they’re often quite lucrative since the house always wins. In addition to the casinos themselves, these REITs often invest in hotels, restaurants and entertainment venues.
VICI Properties Inc.
VICI Properties Inc. (NYSE: VICI) invests in hospitality, entertainment and gaming properties, and it owns such recognizable properties as Caesars Palace Las Vegas, MGM Grand and the Venetian Resort Las Vegas. In all, the company owns 43 gaming facilities, which include over 58,000 hotel rooms and over 450 restaurants and entertainment venues.
VICI closed at $30.77 on Oct. 25, and its stock price in the past 52 weeks has ranged from $26.23 to $35.69 — a relatively narrow range given the market volatility. Its forward dividend is $1.56, yielding 5.19%.
Gaming and Leisure Properties Inc.
Gaming and Leisure Properties Inc. (Nasdaq: GLPI) owns and operates 57 gaming facilities in 17 states, including Ameristar Black Hawk and Bally’s Casino – Black Hawk in Colorado, Dover Downs in Delaware, Plainridge Park Casino in Massachusetts, Hollywood Casino Aurora in Illinois, Belterra Casino Resort in Indiana, and Isle of Capri Casino in Iowa, among many others.
With a forward dividend of $2.82, resulting in a yield of 6.14%, Gaming and Leisure Properties closed on Oct. 25 at $47.65. This price was right in the middle of its relatively narrow 52-week range of $41.81 to $52.87.
Real estate investment trusts can be volatile in terms of their stock price and their dividends. However, real estate has a tendency to act as a hedge against inflation, making it attractive in times when equities may not be. And since REITs provide income as well as price appreciation, there may be a place for them in your portfolio.
Data is accurate as of Oct. 25, 2022, and is subject to change.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.