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Top 5 Dividend REITs for Long Term Investors - Buy and Hold Dividends - YouTube
Channel: Learn to Invest - Investors Grow
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Hi, I'm Jimmy.
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In this video, we're gonna look at five dividend
paying REITs.
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That could be great long term investments
for dividend investors, a REIT, just so we're
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all on the same page is short for real estate
investment trust.
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And basically, it's a way to invest in real
estate, but through the stock market.
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So the goal of this video is to see if we
can identify some specific dividend paying
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REITs that are potentially great long term
investments that could fit into or one of
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them at least could fit into each of our investment
portfolios.
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So I tried to vary where they come from and
what they focus on.
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That way.
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We don't end up with just five dividend paying
REITs that do the exact same thing.
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Okay, so let's jump in our first real estate
investment trust is QTS realty trust ticker
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symbol QTS.
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QTS currently has a dividend yield of about
3%.
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And what QTS does is that they're developers,
operators and owners of data centers, data
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centers, I think, have great long term opportunities
from a growth perspective.
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So we'll come back to this one later.
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But this is a smaller REIT, they have a market
cap of about $4 billion.
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But I do think that again, they have some
upside since data centers are likely to continue
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to grow for many years.
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Okay.
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Now, I also think it makes sense for us to
take a peek at price to funds from operations
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for each of the REITs that we're looking at
today.
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And if we're curious funds from operations
for a REIT is sort of like a cash flow from
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operations for a regular company.
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So we can compare that to the current price.
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And we end up with something closer to price
to earnings or even price to free cash flow.
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Now, often times, it may make sense for us
to look at funds from operations rather than
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something like a more traditional earnings
per share, when we're analyzing REITs.
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So as you can see, QTS is current price to
funds from operations or FFO for short, well
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they're currently trading at about 22 x.
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Now, this is tied for highest on our list.
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And another good REIT is a company called
Digital realty trust.
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They do something very similar to this REIT,
but they have funds from operation price to
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funds from operation of about 28 x right now.
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That's why I elected to go with this one.
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Although if we were looking for a bigger company,
digital realty trust, their ticker is DLR,
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they're also quite good.
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But again, I was looking for a lower ratio,
cuz in theory they could be better price.
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Okay, now shifting back to QTS.
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Well, QTS, we could see their dividend history
has been rather consistent for the past few
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years.
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So overall, I'm a fan of QTS, or even DLR.
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So I think that these types of REITs will
do well and I've actually got another one
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later on in the video.
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Okay, now let's shift over to our second real
estate investment trust in public storage.
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ticker symbol PSA public storage has a dividend
yield of about three and a half percent right
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now.
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Their price to FFO is about 22 x tied with
the company from before.
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And they own a bunch of storage facilities.
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As we may have guessed, now, when we pull
up their dividend history, well, we can see
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that they have consistently paid out about
$2 per quarter in dividends.
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So $8 per year in dividends.
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So from a dividend perspective, this has been
quite consistent for dividend investors.
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And I expect for this REIT to continue to
do well over the long run.
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Okay, next up, we have a more conservative
REIT, called the Gladstone land Corporation,
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ticker symbol LAND Gladstone has a dividend
yield of about three and 3.8%.
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And they're currently trading at 21 times
funds from operations.
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Now for a curious why I call it a conservative
REIT.
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Well, what they do is they own land, and they
rent out that land, to corporate and independent
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farmers.
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So basically, they own a whole ton of farmland,
and it's likely that this will be a solid
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long term business since people are likely
to always need food.
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Okay.
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Now, once again, I should point out that this
is a much smaller REIT, their market cap is
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just $300 million.
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So it is fairly small, but I thought it made
sense to include some smaller REITs in this
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whole thing, because oftentimes, people don't
talk about some smaller opportunities that
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in theory, have some growth opportunities
that may be some of the larger REITs don't
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have and if you're curious, this is their
dividend history going back the past few years,
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so it looks to be heading in the right direction.
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Okay, now we're shifting back to a larger
REIT in Cyrus one ticker symbol CONE and he
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once again, Cyrus one focuses on data centers,
and they're one of the largest data center
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providers in the United States, although they
are a global data center company.
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Right now, they have a dividend yield of about
2.8%.
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And they're trading at just 18 times FFO.
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So overall, this could be a good dividend
REIT for the long run, and we take a peek
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at their dividend history, or we can see that
they've had some nice growth.
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Their dividends for the past few years.
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Okay, moving right along.
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Up next we have the Alexandria real estate
equities company, ticker symbol ARE.
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Well, what this really does is they lease
out properties to the pharmaceutical, biotech,
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they have some research companies, they have
some personal care product companies, they
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lease out buildings and properties to companies
like that in those sectors.
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So once again, I expect for these types of
industries and companies to do well for the
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long run.
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And I also expect that largely, these are
going to be industries that have to work in
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person, or at least have benefits of working
in person versus remote in many other industries.
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So I would expect this type of REIT real estate
company to do well, since they're likely to
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keep a lot of their tenants.
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Now, Alexandria has a dividend of about 2.7%.
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And they currently trading at a price to FFO
of about 16 x.
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So Alexandria has the lowest price to FFO
on our whole list, which implies that at least
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compared to the other REITs that we're looking
at, they could be a bit more undervalued.
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And then we check out their dividend history.
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Or we can see that they've had some impressive
growth in their dividend in the past few years.
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Now, one of the advantages of REITs is that
they don't have to pay corporate income taxes,
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as long as they pay out most of their profits
to their shareholders, which is how we can
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end up with great dividends from relatively
small companies, or even new REITs.
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That's often one of the reasons I one of the
primary contributing factors as to why REITs
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can have good dividends.
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And I recognize that REITs are a bit unusual
when compared to more traditional companies,
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and actually did a REIT primer video not too
long ago, where I run through the basics of
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what a REIT is, and what makes them unique.
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So if you're curious, perhaps that could be
a good next video for you to watch.
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I got a link right here.
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I got a link in the description below.
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And thank you so much for sticking with me
all the way to the end of the video.
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I really appreciate it.
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Thanks and I'll see in the next video.
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