Investors looking for income are often directed toward bonds or stocks with huge dividends, however, as a result of lower interest rates, people have fled bonds and bid up the prices of stocks. Even investment firm Blackrock noted on its blog a few months ago, "though equities still look reasonably priced in the aggregate, not all corners of the equity market look equally attractive as options for income-oriented investors."
Thankfully, these three big dividend payers still offer opportunity.
Blackstone is a leading operator in the investment and advisory portion of the financial services industry, with more than $265 billion in total assets under management. Digital Realty Trust provides access to rentable data center space in the burgeoning world of "big data" to companies not looking to build their own sites. Lastly, there is the relatively self-explanatory Health Care REIT, which invests in housing for the growing elderly population as well as broader health care real estate.
All three have positioned themselves as leaders in industries projected to be at the forefront of economic growth in the United States and beyond in the coming years.
Simply being involved in a growing industry is no cause for an investment, and one of the critical considerations is the performance of the company itself. Yet all three companies here are thriving as well.
Blackstone reported record results for both the fourth quarter and the full year in 2013, as it grew its economic net income -- which excludes transaction related charges -- by a staggering 76% for the full year to top $3.5 billion. Incredibly, this major gain was seen over the record level posted in 2012. Its assets under management grew by 26%, which just narrowly fell short of the staggering 28% growth it has averaged since 1995. Clearly, it has been on a tremendous run, and signs point to that continuing in the future as it continues to grow its portfolio, especially its real estate assets.
Health Care REIT also delivered record results as its fourth-quarter normalized funds from operations rose by 16% to $0.99 per share and its full-year results were up by 8% to $3.81. The company expects it will continue its growth into 2014 and is anticipating a 3% to 6% increase in its earnings power, and like the others, its CEO George Chapman was rather optimistic, saying, "[e]ntering 2014, our relationships, immersion in health care, asset quality, mix of short and long-duration leases, and international reach uniquely position us to deliver superior, consistent growth."
Finally, there is Digital Realty Trust, where funds from operations per share grew by 7% in 2013 to $4.74, as it also signed on record numbers of new leases in both the fourth quarter and the full year. The company noted its strong results were ahead of its plans, and CEO Michael Foust said the "strong fourth quarter leasing and financial results set the stage for positive forward momentum in 2014."
All three are operating remarkably well in industries that should allow them to continue their strong performances into the future.
While the relative value is always a key consideration, it's vital to remember the advice of Warren Buffett's mentor Ben Graham that "price is what you pay, value is what you get," and all three of these companies with great dividends and attractive growth potential certainly appear to provide great value.