Most REITs increased dividends during 2014, indicating confidence in FFO growth. Improved profitability makes additional dividend increases likely.
Health Care REITs offer attractive yields of 5.3% on average, up slightly due to dividend increases. Industrial REITs now yield 4.4%, while Office REITs yield 3.7% on average. Yields for Residential REITs are now 3.5%, as Residential REITs rallied on strong earnings reports. Retail REITs now yield 4.2% on average. Specialty REITs yield 4.1%. Hotel REITs are still the lowest yielding sector at 2.7%. Financial REITs offer income investors the highest yield, at 8.3% on average.
Variability in yield for each sector is greater than shown here. Average yield for all REITs as of July, 2014 is 4.3%.
REIT Growth and Income Monitor covers 132 REITs with total market cap of $748 billion, as of the end of July, 2014.
Expanded coverage of Retail REITs added $23 billion to REIT market cap during June, 2014, while rally for Retail REITs added another $5 billion during July, 2014. Retail REIT coverage now includes American Realty Capital Properties, Brixmor Property Group, Retail Properties of America, Retail Opportunity Investments and Rouse Properties, while spin-off of Washington Prime Group from Simon Property Group added another new Retail REIT. Realty Income, previously among Specialty REITs, was moved to the net leased portion of Retail REITs, adding $10 billion in market cap to Retail REITs.
During August, 2014, Specialty REITs also expanded market cap from new coverage. Iron Mountain added to Storage REITs, while pending REIT conversion of Equinix added to Data Center REITs. New coverage of Specialty Cell Tower REIT Crown Castle added $25 billion to total market cap of Specialty REITs.
|Note: This report is for information only. It is not a solicitation or an offer to buy or sell securities of any company mentioned herein. Atlantis Investment Co., Inc. does not make markets in the securities mentioned herein and does not have investment banking relationships with any company mentioned herein. The views expressed are those of the authors, and are based on a diligent review of available information. The report is based on information which is believed to be accurate, but we do not guarantee its accuracy or completeness. Atlantis Investment Co., Inc., its officers, employees and stockholders (and members of their families) and its customers may have long/short positions or holdings in the securities mentioned, and they may at any time hold, increase or decrease these positions. Neither the authors of this report nor any related household members are officers, directors, or advisory board members of any company mentioned herein. Atlantis Investment Co., Inc. or any of its employees do not own shares equal to 1% or more of any company mentioned herein. Copyright 2014 Atlantis Investment Co., Inc.|