These 3 real estate investment trusts this week hit new price highs and each one pays a dividend of greater than 3%: Sabra Healthcare REIT, CareTrust REIT and InvenTrust Properties. They’re all continuing upward despite the recent trend of most REITs, as measured by benchmark ETFs, to keep dropping.
Real estate investment trusts are designed to allow investors to participate in the possible increased valuations of buildings and land that are owned — while paying out dividends from these income-producing properties. There are many wrinkles and differences among types of REITs but that’s the basic concept.
First, take a look at the dwindling prices of those exchange traded funds that invest widely in the sector. Here’s the daily price chart of the iShares U. S. Real Estate ETF which holds a diversified selection of 73 REITs in its portfolio and is generally considered a benchmark for the group as a whole:
Note how the early October low dropped below the March low, a sign of weakness for the ETF. It’s bounced off of this month’s $75 low but until it makes it back above the down trending moving averages, this is a bearish look for this interest rate-sensitive sector.
REITs With New 52-Week Highs:
Sabra Healthcare REIT invests in managed senior housing, in skilled nursing facilities and in other healthcare-related properties. Bank of America
BAC
Securities last week upgraded their opinion of Sabra from “neutral” to “buy” with a price target of $14 to $16. The REIT pays an 8.46% dividend.
CareTrust REIT maintains a portfolio of skilled nurse care facilities as well as senior housing properties such as assisted living centers. There are no earnings this year but analysts are expecting 53% growth for next year. CareTrust offers investors a dividend yield of 5.23%.
InvenTrust Properties is a retail REIT which invests in open air shopping centers, mostly in the South and Southwest. Earnings are off by 90% for this year but analysts estimates have the company showing 171% growth for the next year. InvenTrust pays a 3.31% dividend. The daily price chart is here:
It’s been better and wiser lately in this sector to be highly selective rather than highly diversified.
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