3 REITs With Upcoming Earnings And Dividend Yields Over 7%

Deciding whether to purchase a stock before or after an earnings report is always difficult. Buy a stock before the report and you risk the stock dropping 5% or more on a bad report. Buy the shares after the report comes out and you could miss out on appreciation if the report is positive.

But when yields are high, as they are now on many real estate investment trusts (REITs), even if you miss out on a small amount of appreciation, the yields you receive can make up for that.

Take a look at three REITs that will soon report third-quarter operating results and whose dividends are presently yielding over 7% annually.

Omega Healthcare Investors Inc. OHI is a Hunt Valley, Maryland-based triple-net equity healthcare REIT that provides financing, capital and leasing to 66 operators in 893 senior housing, skilled nursing and assisted living facilities across 42 U.S. states and the United Kingdom. Omega Healthcare Investors has no part in the day-to-day management of the facilities, which are run by the operators.

Omega Healthcare has performed well in 2023, with a total return of 30.62%.

On Oct. 10, Bank of America Securities analyst Joshua Dennerlein upgraded Omega Healthcare from Neutral to Buy and announced a $36 price target. Dennerlein said Omega Healthcare will benefit from lease restructurings on its skilled nursing facilities and a recovery in occupancy levels in senior housing.

On Oct. 17, Wells Fargo analyst Connor Siversky maintained an Equal-Weight rating on Omega Healthcare and raised the price target from $33 to $34.

Omega Healthcare pays a $0.67 quarterly dividend, and the $2.68 annual dividend presently yields 7.76%. The forward annual funds from operations (FFO) payout ratio of 96% is high, so an increase in third-quarter FFO would be beneficial for keeping the dividend intact. Omega Healthcare's third-quarter earnings will be announced on Nov. 2.

EPR Properties EPR is a Kansas City, Missouri-based diversified experiential REIT that owns and operates 290 movie theater chains, amusement parks, ski resorts, fitness centers and other recreational venues across 44 states. It also owns 73 early childhood education centers and nine private schools for a total portfolio of 363 properties.

On Aug. 2, EPR Properties reported its second-quarter operating results. FFO of $1.28 beat the estimates of $1.26 and was ahead of FFO of $1.17 in the second quarter of 2022. Revenue of $172.19 million crushed the estimates of $148.66 million by 16.31% and was a 7.77% increase over revenue of $160.45 million in the second quarter of 2022.

Along with the second-quarter results, EPR Properties also delivered its full-year 2023 guidance of $5.05 to $5.15, which easily beat the estimated consensus of $4.90.

On Sept. 21, analyst Siversky initiated coverage of EPR Properties with an Underweight rating and announced a $40 price target.

EPR Properties has performed well throughout 2023, with a total return of 23.18%.

EPR Properties pays a monthly dividend of $0.275 per share. The $3.30 annual dividend yields 7.76%. The next dividend is payable on Nov. 15 to shareholders of record as of Oct. 31. The ex-dividend date is Oct. 30.

EPR Properties will announce its third-quarter operating results on Oct. 25.

W.P. Carey Inc. WPC is a New York City-based diversified net-lease REIT whose single-tenant properties include industrial, warehouse, office, retail and self-storage units. It was founded in 1973 and recently celebrated its 50th year of investing in properties.  

W.P. Carey has 1,475 net-leased properties with approximately 180 million square feet in 26 different countries. Its portfolio includes 398 tenants from over 30 industries and an excellent occupancy rate of 99%.  

In a stunning announcement on Sept. 21, W.P. Carey announced that its board of directors approved a plan to spin off 59 office properties into a separate publicly traded REIT called Net Lease Office Properties (NLOP).  In addition, the board is creating an asset sale program to sell the 87 office properties still retained by W.P. Carey. The spinoff will close on Oct. 19, and all properties in the asset sale program will be disposed of by January.

Several reasons were given for this decision, but perhaps the main one is to improve the overall portfolio quality and metrics, including an increased weighting of warehouse and industrial assets. The company will use the proceeds of the spinoff and sale to reduce more than $1 billion dollars of debt and to fund new industrial acquisitions.

As a result of the announcement, the share price dropped from $62.70 to a low of $51.36. The share price has stabilized since, and the most recent close was $55.48. The present quarterly dividend is $1.071, and the annualized dividend of $4.284 yields 7.7217%. The company is expected to reduce the dividend by at least 1% following the closing of the sales and spinoff.

On Oct. 3, Raymond James analyst RJ Milligan maintained an Outperform rating on W.P. Carey but lowered the price target from $78 to $63. On Sept. 28, Scotiabank analyst Nicholas Yulico maintained a Sector Perform rating on W.P. Carey, while lowering the price target from $71 to $61. Despite the price target cuts, it's positive to see analysts maintaining their previous positions on W.P. Carey.

W.P. Carey will announce its third-quarter earnings on Nov. 2.

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