Real Estate Investment Trusts, or REITs, are known for their dividends. The average dividend yield for equity REITs is right around 4.3%. However, there are some high-dividend REITs out there that pay significantly more than average. Here are three high-dividend REITs that look like a great opportunity to buy now.
Omega Healthcare Investors, Inc. (NYSE: OHI)
Omega Healthcare Investors holds investments in healthcare facilities such as assisted living, skilled nursing, and rehab hospitals.
While the COVID-19 pandemic has been hard on long-term care facilities in general, the operator's that lease Omega Healthcare Investors' properties rely on government funding, which is why they were able to collect 98% of their rent in April.
This REIT did take on some additional debt but overall looks promising moving forward since they appear to be weathering the storm well and the demand for this type of real estate isn't going anywhere.
Plymouth Industrial REIT, Inc. (NYSE: PLYM)
Plymouth Industrial REIT invests in industrial real estate such as distribution centers, warehouses, and light industrial. The REIT focuses on Class B properties in secondary markets in the Midwest.
Plymouth has an exceptionally high dividend yield of 12.68%, but that comes at a price of some higher risk than the other REITs on this list. This REIT has a high amount of leverage, with a debt-to-EBITDA ratio of 11.09. This would normally be a huge red flag, but it's due to their aggressive acquisition strategy.
Their debt is all at a fixed interest rate, and it's well staggered. They also don't have any major debt maturing through 2021, which means their high leverage shouldn't knock their feet out from under them during this economic downturn.
This REIT could be a great buy right now while it's still recovering from this hit last quarter.
Innovative Industrial Properties, Inc. (NYSE: IIPR)
Innovative Industrial Properties invests in industrial properties that are leased to state-licensed operators with state-regulated medical cannabis facilities.
This REIT has a much more conservative dividend yield than the other REITs on this list, at 5.4%. However, the cannabis industry is projected to grow significantly over the next few years, so this young REIT is expected to grow with it.
Many investors are still leery of anything tied to cannabis, but as regulations become more favorable, and the REIT continues to prove itself, many more investors are likely to start getting on board. Innovative has been recovering well from the pandemic, so now seems to be the best time to take advantage of this opportunity.
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Are these high-dividend REITs right for your portfolio?
REITs are great for investors who like dividend stocks, and high-dividend REITs are even more attractive with their recurring payouts. However, the high dividend yields come with a higher level of risk. If your portfolio has room for some aggressive investments, then these REITs are ones you'll want to take a serious look at.
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