The 5 Best REITs with High Growth

REITs are a great way to get exposure to the real estate market while earning a high dividend yield.  REITs pay out 90% of their income to shareholders to avoid paying income taxes and therefore have very high dividend yields.  Because of this distribution norm these investments usually have a very high payout ratio.

On our REIT dividend list ranks these stocks based on historical performance.  Below is a list of real estate investment trusts that have a dividend yield over 4% and a dividend growth rate over 10%.

Digital Realty Trust – DLR

Digital realty trust buys, develops and manages technology related real estate properties. DLR owns 96 properties which are mostly in the US. 14 of those properties are in Europe. Most of their US property investment is focused in Dallas, Chicago and Boston.

DLR has a dividend yield of 4% and a 5 year dividend growth rate of 20%. They have increased their dividend for 5 consecutive years. DLR is tied for 9th position on our best dividend stock list. They have a 3 year net income growth rate of 36%.

Annaly Capital Management – NLY

Annaly is one of the most popular REITs because it has a high dividend yield and a history of increasing it’s dividend. NLY is a very diversified REIT. They invest in multiple forms of mortgage securities and also manage an number of different properties.

NLY has a dividend yield of 15.4% and a 5 year dividend growth rate over 40%. Their 3 year net income growth rate is 45%.

Two Harbors Investment Corp – TWO

Two Harbors investment trust was incorporated in 2009 so we don’t have a lot of history on them. They mostly invest in mortgage backed securities and related investments.

TWO had a dividend yield of 17.1%. They have just completed their second year of paying dividends and have a year over year increase of 16.25% in 2011.

Anworth Mortgage Asset Corp – ANH

Anworth invests in United States mortgage backed securities. The companies mortgage derivative security investments cannot exceed 10% of their portfolio.

Anworth has a dividend yield of 14.8% and a 5 year dividend growth rate of 107%.

Hatteras Financial Corporation – HTS

Hatteras Financial Corporation is managed by Atlantic Capital Advisors. They primarily invests in mortgage securities that are guaranteed or issued by government agencies.

HTS has a dividend yield of 15.3 and a 3 year dividend growth rate of 44%. They have increased their dividend for each of the last two years.

8 replies
  1. William E. Powell, M.D.
    William E. Powell, M.D. says:

    You are one of the few information sites that give the data without having to go through the interminable ads that end up asking you to pay for subscription or buy a publication. Kudos.

  2. Jim Nelson
    Jim Nelson says:

    I own several of those REITs, it is reassuring to see them listed here.
    Keep up the good work.

  3. Al Breslow
    Al Breslow says:

    I own a couple of these and find that in most situations they really round out a dividend portfolio.
    I also appreciate your information without having to jump through hoops.

  4. don gary
    don gary says:

    I’d like to echo the positive comments of the others. One question I’m hoping you’ll answer: Why isn’t AGNC on your list? Thanks.

  5. Domenic
    Domenic says:

    These are great picks.However,I am a bit cautious in adding these names into my ‘portfolio,only because i believe the road ahead may be differcult once the ‘other shoe’ falls off.REITS will be hit hard if and when the next 2-3 quarters in the new year show declines perhaps negatives.I hate timing markets yet i sense the clouds are gathering as we approach the elections in nov.2012.I am holding my breathe til after then.see how reits react,then buy and hold.(remember buy and hold?) cheers

  6. DSO
    DSO says:

    @don – AGNC could have been on the list but somehow it didn’t show up in the screen I did. It has a great yield of 19.9% and a 3 year dividend growth rate of almost 97%. It definitely deserves attention.

  7. tom billiodeaux
    tom billiodeaux says:

    dito above and thanks. I have been watching these and own several. while i bought high, long term may not cause harm, as i am in this for the long (10 yr) run. Agree with caution for next 2 quarters, so you don’t do as i did and loose your capital. RSO is good to mention also and won’t loose much at its price of 5.15 and paying 1.00/yr. Check it ratio and cash.

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