If history is any indication, one of the best ways to make long-term money in the stock market is by having the courage to buy stocks when they are largely out of favor. This is especially true of dividend stocks because when the prices decline, investors can lock in higher dividend yields for life.
Certainly, investors should do their homework to ascertain the safety and reliability of a company’s dividends before buying on the basis of yield alone. Here are three real estate investment trusts (REITs) whose recent price declines have substantially increased their dividend yields.
Alexander’s Inc. (NYSE: ALX) is a Paramus, N.J.-based retail REIT that leases, manages and develops commercial properties in the New York City metropolitan area. The company is managed by Vornado Realty Trust.
Over the past month, Alexander’s has dropped from $260 to a current price of $233, pushing up the annual dividend yield to a quite lofty 7.7%. This price decline began two weeks after the REIT reported second-quarter earnings, a report in which funds from operations (FFO) surprised to the upside. So it would seem the price drop cannot be blamed on failing metrics. The more likely culprit was Federal Reserve Chairman Jerome Powell’s speech regarding future interest rate hikes. When interest rates rise, REIT stock prices often decline.
The dividend payout ratio for Alexander’s is 79%, which is about the maximum that income investors find comfortable. The dividend has been constant at $4.50 per quarter since 2018, but the five-year average yield is only 5.92%. Therefore, Alexander’s is currently paying a larger dividend yield than the norm and could be a bargain at this level.
City Office REIT Inc. (NYSE: CIO) is an office REIT based in Dallas. Most of its portfolio is located within the Sun Belt and the Pacific Northwest.
Second-quarter revenue of $45.5 million and FFO of 40 cents per share were surprises to the upside, but earnings per share (EPS) were substantially lower than the year-ago numbers. Also, a big chunk of the revenue was from profits on the sale of an office building in Dallas.
Although COVID-19 resulted in the quarterly dividend being cut from $0.235 to $0.15 in April 2020, it was then hiked to $0.20 at the beginning of 2022.
City Office’s price peaked in January at just below $21. Over the nine months since, the share price has been slashed to $11.27. However, the current annual dividend of 7% is easily supported by a very low payout ratio of 50%. Investors looking for a beaten-down REIT with a safe-looking high-yield dividend may want to take a closer look at this stock.
Armada Hoffler Properties Inc. (NYSE: AHH) is a vertically integrated, diversified owner and manager of office, retail and multifamily properties throughout the Mid-Atlantic and Southeastern U.S. The Virginia Beach, Virginia-based company was founded in 1979 by Executive Chairman Daniel Hoffler.
Armada stock is up a whopping 92% in total since its 2020 COVID-19 lows, but like many in the REIT industry, it has dropped about 15% in the past three weeks. The metrics are mostly positive on this company, and since almost all of the entire REIT sector has sold off lately, it would appear that the price drop is likely just the proverbial “throwing the baby out with the bath water.”
For example, Armada has beaten the street’s estimates for the last four consecutive quarters. Second-quarter FFO of 30 cents per share was a penny higher than a year ago. Revenue of $55.22 million was up from $47.38 million in the same quarter of 2021.
Given that this stock is probably down from no fault of its own, investors may want to grab it with its current 6% annual dividend yield while they can.
Real estate is one of the most reliable sources of recurring passive income, but publicly-traded REITs are just one option for gaining access to this income-producing asset class. Check out Benzinga’s coverage on private market real estate and find more ways to add cash flow to your portfolio without having to time the market or fall victim to wild price swings.
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Dividends are one of the best benefits to being a shareholder, but finding a great dividend stock is no easy task. Does Axis Capital (AXS) have what it takes? Let’s find out.
Investing in a top dividend stock should involve more than just looking at which one has a high yield today. With increasing yields, that means you will be collecting more in dividend income than you are right now, which gives you an incentive to buy and hold. Three high-yielding dividend stocks that analysts believe could make significant increases to their payouts over the next two years are Amgen (NASDAQ: AMGN), Tapestry (NYSE: TPR), and Stanley Black & Decker (NYSE: SWK).
Investors turned bearish as the economy weakened in the first half of the year, setting the stock market on a downward trajectory. Jim Simons of Renaissance Technologies added to his stake in Upstart Holdings (NASDAQ: UPST) in the second quarter, and Philippe Laffont of Coatue Management started a position. Meanwhile, Ken Griffin of Citadel Advisors and Israel Englander of Millennium Management bought more shares of Elastic (NYSE: ESTC).
The Wall Street Journal
A big, green step forward seems likely under the new CEO, but for the company’s true priorities, investors should watch its spending.
In this article, we discuss 10 monthly dividend stocks with highest yields. You can skip our detailed analysis of dividend stocks and their performance in the current market environment, and go directly to read 5 Monthly Dividend Stocks with Highest Yields. The volatile stock market has brought dividend stocks into the limelight this year. Investors […]
American City Business Journals
McLean management and IT consulting giant Booz Allen Hamilton Inc. (NYSE: BAH) said Wednesday that CFO Lloyd Howell will retire at the end of the year and that he will be replaced by Matthew Calderone, currently the company’s chief strategy officer. Calderone will take the CFO role on Oct. 1, while Howell, who first joined Booz Allen in 1988, will remain in his executive vice president role through the end of the year to assist with the transition. Calderone joined Booz Allen in 2000 as a management consultant and worked with CEO Horacio Rozanski on the company’s Vision 2020 strategy, which shifted the 108-year-old firm’s focus to emerging technologies like artificial intelligence, cybersecurity and data analytics.
Boise Cascade (BCC), Triton International (TRTN), TotalEnergies (TTE), McKesson (MCK) and RCI Hospitality (RICK) seem compelling cheap picks amid volatility.
According to the latest CPI (consumer-price index) report, U.S. inflation cooled down slightly from July but not enough to appease the markets. Overall prices rose by 8.3% from the same period a year ago, slowing down from July’s 8.5% uptick and further down from June’s 40-year high showing of 9.1%. On a monthly basis, after plateauing in July, consumer prices rose by 0.1%. As the expectation was for a rise of 8.1% over last year and a drop of 0.1% compared to last month, the markets did what th
A rising interest-rate environment typically pressures bond prices, which move inversely to yields. But this could be a good entry point for short-term bonds.
The unexpected rise in inflation reported on Tuesday was an unwelcome blow for President Joe Biden’s Democrats, but a new Reuters/Ipsos poll shows Democratic voters just as enthusiastic as their Republican counterparts, pointing to a potentially close contest in November’s elections. Republicans remain favored to win control of the U.S. House of Representatives – with the Senate on a knife-edge – amid widespread dissatisfaction with Biden’s presidency and months of sharp price increases that the poll showed remain the top concern for Republican and Democratic voters alike. The results of a new Reuters/Ipsos poll, however, show Democrats appear just as eager to vote as Republicans, running counter to expectations that a weak economy would depress enthusiasm in the president’s party, said Daron Shaw, an expert on polling and elections at the University of Texas at Austin.
When stock market volatility and inflation persist, smart retirees seek ways to make the most of their money. “Even when the seas are rough, there are always little, tiny things you can do,” says certified financial planner Andrew Feldman, founder of AJ Feldman Financial, based in the Chicago area. “Rather than trying to squeeze more returns in a period like this, it’s better to reduce your expenses,” says Daniel Lee, director of financial planning and advice at BrightPlan, a financial wellness benefit provider based in San Jose, Calif.
There is always a collective groan in the classroom when the teacher turns the lesson to a subject that no student likes. In that vein, sorry, but I need to talk about the bond market today. It has been absolutely awful this year.
The Wall Street Journal
The Justice Department on Thursday filed an antitrust lawsuit challenging a planned $4.3 billion deal in which leading lockmaker Assa Abloy AB is seeking to acquire a U.S. rival. The civil lawsuit, filed in a federal court in the District of Columbia, seeks to block the Swedish company’s planned acquisition of Spectrum Brands Holdings home improvement division. Spectrum Brands sells Kwikset-branded locks and Pfister-branded faucets, among other household items.
SINGAPORE/HONG KONG (Reuters) -Private equity firm CVC Capital Partners is selling Malaysian funeral services provider Nirvana Asia Ltd in a deal that could fetch up to $2 billion, three people with knowledge of the matter told Reuters. The sale process, which is being run by Morgan Stanley, has entered its second round of bids, two of the people said. Suitors in the second round are mostly strategic buyers based outside Asia, said one of the people and a separate person with knowledge of the deal.