[1]In an Investopedia.com report [2], author Dan Moskowitz documented the top five real estate investment trusts (REITs) that will persevere consumers’ capital investments. He also cautions to steer clear of trusts that do not have investor’s best interest of growing their capital at the forefront of their priorities.
“REITs allow anyone to invest in portfolios of large-scale properties the same way they invest in other industries–through the purchase of stock, REIT.com [3]says. “In the same way shareholders benefit by owning stocks in other corporations, the stockholders of a REIT earn a share of the income produced through real estate investment–without actually having to go out and buy or finance property.”
Top Five Investopedia.com Real Estate Investment Trusts:
According to Investopedia.com, Armour Residential REIT, Inc. (ARR) has the highest yield of 15.6 percent of the trusts listed. This trust invests in and manages a portfolios of residential mortgage-backed securities (RMBS). Over the past 12 months, the stock at this company has depreciated 30.75 percent.
Resource Capital Corp. (RSO) originates, holds, and manages commercial mortgage loans and other commercial real estate debt and equity. Investopedia says that the yield for this corporation is 14.8 percent, while its debt-to-equity ratio is 2.03. However, in a bull market, the stock for this company has consistently depreciated over the past two years and depreciated 26.74 percent over the past year.
Despite a depreciation of 0.25 percent over the past year, New York Mortgage Trust Inc. (NYMT) had a 13.9 percent yield, Investopedia.com reported. However, this trust has a short position of 7.30 percent with a debt-to-equity ratio of 10.02.
Through its subsidiaries, Chimera Investment Corp. (CIM) invests in RMBS, residential mortgage loans, commercial mortgage loans, real estate-related securities, and various other asset classes, according to Investopedia. Chimera offers a yield of 12.80 percent, and the stock has depreciated 8.89 percent over the past year. The debt-to-equity ratio is 3.76, while the short position is just 0.90 percent.
According to Investopedia, PennyMac Mortgage Investment Trust (PMT) primarily invests in residential mortgage loans and mortgage-related assets. It yields 13.40 percent, but the stock has depreciated 13.78 percent over the past year. PennyMac's short position is 1.60 percent, and the debt-to-equity ratio is at 2.63.
“High-yielding REITs shouldn’t be seen as easy money,” Moskowitz wrote. “There’s a reason the yield is so high, and it’s usually due to mounting debt or a lack of profitable growth. The high debt levels for these REITs don’t mesh well with the current economic climate. If you invest, then you might find near-term success, but you would be playing with fire.”
Click here [2] to view the full Investopedia.com report.