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When structuring a portfolio, it’s common to park cash in assets that generate income. After all, everybody loves getting paid.
However, not all assets stack up the same in terms of providing income.
One great way to invest for a stream of income is to target REITs (Real Estate Investment Trusts). REITs are companies that own – and typically operate – income-producing real estate or real estate-related assets.
It’s a widely-deployed strategy that allows individual investors to earn a share of the income generated through commercial real estate ownership without having to own commercial real estate.
To meet the qualifications to be a REIT, a company must have the bulk of its assets and income intertwined with real estate investment. In addition, the company must distribute at least 90% of its taxable income to shareholders annually via dividends.
It’s easy to see why income-focused investors love to target these companies.
For those seeking to invest in the space, a few highly-ranked REITs include National Retail Properties (NNN - Free Report) , Kite Realty Group Trust (KRG - Free Report) , and EPR Properties (EPR - Free Report) .
On top of hefty dividend payouts, REITs are typically less volatile, as seen in the chart below that illustrates the year-to-date performance of all three stocks with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
All three stocks have widely outperformed the S&P 500 year-to-date, undoubtedly a major positive. Let’s take a closer look at each company.
National Retail Properties
National Retail Properties (NNN - Free Report) maintains a conservatively managed, diversified real estate portfolio with properties subject to long-term net leases with established tenants. The company sports a Zacks Rank #2 (Buy).
NNN’s dividend metrics would make any income investor celebrate. The company’s annual dividend yields a sizable 4.6%, much higher than its Zacks Finance Sector.
In addition, NNN has upped its dividend payout five times over the last five years, with a five-year annualized dividend growth rate of 2.5%.
Image Source: Zacks Investment Research
NNN’s top-line is in excellent health; the Zacks Consensus Sales Estimate for the company’s current fiscal year (FY22) resides at $770 million, reflecting a rock-solid 6.2% Y/Y increase. Below is a chart illustrating the company’s revenue on an annual basis, with its TTM revenue representing the final data plot.
Image Source: Zacks Investment Research
Kite Realty Group Trust
Kite Realty Group Trust (KRG - Free Report) is focused primarily on developing, constructing, acquiring, and operating high-quality neighborhood and community shopping centers in selected growth markets in the U.S. The company boasts a Zacks Rank #2 (Buy).
KRG thoroughly enjoys rewarding its shareholders – the company has increased its dividend payout a whopping nine times over the last five years. KRG’s annual dividend yield sits at an enticing 3.8%, well above its Zacks Sector average.
Image Source: Zacks Investment Research
In addition, the company’s top-line is projected to skyrocket; Kite Realty Group’s annual revenue is projected to reach $755 million in FY22, reflecting a massive 102% triple-digit year-over-year uptick.
Image Source: Zacks Investment Research
EPR Properties
EPR Properties (EPR - Free Report) is a specialty real estate investment trust that invests in three primary segments: Entertainment, Recreation, and Education. As it stands, the company carries a Zacks Rank #2 (Buy).
EPR has rock-solid dividend metrics; the company’s annual dividend yields a sizable 6.4%, well above that of its Zacks Sector. In addition, EPR has increased its dividend four times over the previous five years.
Image Source: Zacks Investment Research
Furthermore, EPR’s top-line growth is undoubtedly a positive – the Zacks Consensus Sales Estimate for the company’s current fiscal year resides at $575 million, penciling in a robust 20% uptick from FY21 sales of $480 million.
Image Source: Zacks Investment Research
Bottom Line
Investing for income is a mega-popular way that some investors like to structure their portfolios. After all, it is a very lucrative strategy.
Receiving a steady income stream helps alleviate drawdowns in other positions and provides a higher level of flexibility.
REITs (Real Estate Investment Trusts) could be seen as a gold standard for income investing, as they must shell out at least 90% of taxable income to shareholders via dividends.
All three companies above carry a strong Zacks Rank and rock-solid dividend metrics, making them suited ideally for investors seeking stocks that provide an income stream paired with low-volatility natures.
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3 Highly-Ranked REITs Paying Investors Handsomely
When structuring a portfolio, it’s common to park cash in assets that generate income. After all, everybody loves getting paid.
However, not all assets stack up the same in terms of providing income.
One great way to invest for a stream of income is to target REITs (Real Estate Investment Trusts). REITs are companies that own – and typically operate – income-producing real estate or real estate-related assets.
It’s a widely-deployed strategy that allows individual investors to earn a share of the income generated through commercial real estate ownership without having to own commercial real estate.
To meet the qualifications to be a REIT, a company must have the bulk of its assets and income intertwined with real estate investment. In addition, the company must distribute at least 90% of its taxable income to shareholders annually via dividends.
It’s easy to see why income-focused investors love to target these companies.
For those seeking to invest in the space, a few highly-ranked REITs include National Retail Properties (NNN - Free Report) , Kite Realty Group Trust (KRG - Free Report) , and EPR Properties (EPR - Free Report) .
On top of hefty dividend payouts, REITs are typically less volatile, as seen in the chart below that illustrates the year-to-date performance of all three stocks with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
All three stocks have widely outperformed the S&P 500 year-to-date, undoubtedly a major positive. Let’s take a closer look at each company.
National Retail Properties
National Retail Properties (NNN - Free Report) maintains a conservatively managed, diversified real estate portfolio with properties subject to long-term net leases with established tenants. The company sports a Zacks Rank #2 (Buy).
NNN’s dividend metrics would make any income investor celebrate. The company’s annual dividend yields a sizable 4.6%, much higher than its Zacks Finance Sector.
In addition, NNN has upped its dividend payout five times over the last five years, with a five-year annualized dividend growth rate of 2.5%.
Image Source: Zacks Investment Research
NNN’s top-line is in excellent health; the Zacks Consensus Sales Estimate for the company’s current fiscal year (FY22) resides at $770 million, reflecting a rock-solid 6.2% Y/Y increase. Below is a chart illustrating the company’s revenue on an annual basis, with its TTM revenue representing the final data plot.
Image Source: Zacks Investment Research
Kite Realty Group Trust
Kite Realty Group Trust (KRG - Free Report) is focused primarily on developing, constructing, acquiring, and operating high-quality neighborhood and community shopping centers in selected growth markets in the U.S. The company boasts a Zacks Rank #2 (Buy).
KRG thoroughly enjoys rewarding its shareholders – the company has increased its dividend payout a whopping nine times over the last five years. KRG’s annual dividend yield sits at an enticing 3.8%, well above its Zacks Sector average.
Image Source: Zacks Investment Research
In addition, the company’s top-line is projected to skyrocket; Kite Realty Group’s annual revenue is projected to reach $755 million in FY22, reflecting a massive 102% triple-digit year-over-year uptick.
Image Source: Zacks Investment Research
EPR Properties
EPR Properties (EPR - Free Report) is a specialty real estate investment trust that invests in three primary segments: Entertainment, Recreation, and Education. As it stands, the company carries a Zacks Rank #2 (Buy).
EPR has rock-solid dividend metrics; the company’s annual dividend yields a sizable 6.4%, well above that of its Zacks Sector. In addition, EPR has increased its dividend four times over the previous five years.
Image Source: Zacks Investment Research
Furthermore, EPR’s top-line growth is undoubtedly a positive – the Zacks Consensus Sales Estimate for the company’s current fiscal year resides at $575 million, penciling in a robust 20% uptick from FY21 sales of $480 million.
Image Source: Zacks Investment Research
Bottom Line
Investing for income is a mega-popular way that some investors like to structure their portfolios. After all, it is a very lucrative strategy.
Receiving a steady income stream helps alleviate drawdowns in other positions and provides a higher level of flexibility.
REITs (Real Estate Investment Trusts) could be seen as a gold standard for income investing, as they must shell out at least 90% of taxable income to shareholders via dividends.
All three companies above carry a strong Zacks Rank and rock-solid dividend metrics, making them suited ideally for investors seeking stocks that provide an income stream paired with low-volatility natures.