One of the best things about real estate investment trusts (REITs) is the diversity of property types, which allows investors to choose subindustries as well as the ability to choose an investment based on its dividend income or recent momentum.
Some income investors buy REITs strictly for high-yielding dividends. Other REIT investors look for ongoing growth. But every once in a while, it’s possible to get both.
Take a look at three distinct REITs with dividend yields above 8%. Each underperformed in 2022 but have recently been one of the best REIT performers over one- and four-week time frames.
Western Asset Mortgage Capital Corp. WMC is a Salt Lake City-based diversified mortgage finance REIT (mREIT) with an emphasis on procuring undervalued mortgage assets. Western Asset Mortgage Capital is externally managed by Western Asset Management Company LLC, which invests in agency residential mortgage backed-securities (RMBSes), nonagency mortgage-backed securities (MBSes) and asset-backed securities (ABSes).
Western Asset Mortgage Capital suffered through a terrible 2022, losing 54.5% from January through mid-December. Since that time, it has a four-week gain of 19.95% and has risen 8.05% over the past five trading days.
The dividend of $0.60 per share was cut to $0.40 per share in April 2022 but has been stable since then. The $1.60 annual dividend per share yields 15.4%.
Global Medical REIT Inc. GMRE is a Bethesda, Maryland-based healthcare REIT that owns specialized facilities it leases to healthcare systems and physician groups. Global Medical REIT owns and operates 189 buildings with over 4.8 million net leasable square feet across the U.S. It has an average rent escalation of 2.1%.
Global Medical REIT pays a quarterly dividend of $0.21, or $0.84 annually, which presently yields 8.01%. In 2022, Global Medical REIT had a total return of negative 42.35%.
But over the past five days, Global Medical REIT has risen 5.22% and has produced a four-week gain of 13.41%.
Office Properties Income Trust OPI is a Newton, Massachusetts-based real estate company that owns, leases and manages office space. Its 162 properties across 31 states have a solid tenant base, including a high percentage of government offices.
Despite this, Office Properties Income Trust has had declining revenue and volatile earnings per share (EPS) over the past three years. Its occupancy rate of 90.7% is still a bit low but represents a recent increase from 89.4%.
Office Properties Income Trust pays a $0.55 quarterly dividend per share, or $2.20 annually, that presently yields 12.9%. Office Properties Income Trust was down about 40% in 2022, touching a 52-week low in mid-October of $12.21, but has since bounced back to over $17 per share.
As for performance over shorter time frames, Office Properties Trust has gained 4.41% over the past five days. The four-week gain of 24.71% is even more impressive.
There is always a cautionary note to be made with very high-dividend yields, as some companies have high yields because of poor performance and may be at risk of dividend cuts. Investors should always perform adequate research and due diligence before investing in any stock but especially those with very high-dividend yields.
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