Friday's Brexit induced market volatility caused many of the high-yield REITs to show their true colors. Many of the safest ones actually gained on Friday acting as a "safe haven" as the rest of the market sold off. This week's Blue Harbinger Weekly is a continuation of our free report titled "Seven Big-Dividend REITs Worth Considering." Specifically, we provide all the details (and full reports) for our Top 3 REITs. And our new Investment Idea this week happens to be an attractive high-yield REIT included in the Top 3.
3. Ladder Capital (9.0% Yield)
Ladder Capital (LADR) is a Mortgage Real Estate Investment Trust (mREIT) with a big 9.0% dividend yield. And the yield climbs to as high as 18.8% if you count its additional special dividend that was paid in December of 2015. The company generates an after tax return on equity of over 12%, and it trades at a discount to its book value. Ladder sold off on Friday (-5.8%) during the Brexit panic, and barring a complete commercial real estate market collapse, now may be an excellent time for investors to consider adding Ladder to the higher-risk portion of their diversified long-term income-focused portfolio. You can read our full Ladder report here:
2. Omega Healthcare Investors (7.1% Yield)
Omega Healthcare Investors (OHI) is a Real Estate Investment Trust (REIT) with a high 7.1% dividend yield. We own it in our Blue Harbinger Income Equity portfolio. The shares were up on Friday (+0.5%) despite the Brexit-induced broad market sell-off. The fact that the share were up, suggests investor confidence in Omega as a “safe haven” trade. This is encouraging considering the unique risks it faces as a Skilled Nursing Facilities (SNF) REIT. We believe OHI also offers attractive price appreciation opportunities considering its leadership position in the SNF industry. Further, a variety of valuation and risk metrics (mainly Price-to-FFO and dividend payout ratio) suggest the dividend is relatively safe and likely to grow. If you are comfortable with the unique risks of an SNF REIT (like we are), Omega currently offers an outstanding opportunity to buy in at a very attractive dividend yield. You can read our earlier full-report write-up on Omega here:
1. Chatham Lodging (6.1% Yield)
Chatham Lodging Trust (CLDT) is a hotel Real Estate Investment Trust (REIT) with a big 6.1% dividend yield, and significant price appreciation potential. The market has dramatically overreacted to slowing growth among hotel REITS, and Chatham in particular offers an attractive investment opportunity for long-term income-focused investors because of its attractive valuation and potential for more dividend increases. You can read our full Chatham report here.