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f you're looking to boost dividend yields in 2025, consider real estate investment trusts (REITs), which are mandated by law to distribute a significant portion of their income as dividends. This can be particularly attractive given that some REITs offer yields of 10% or more.
While the average yield among this group of seven REITs is 12.4%, it's essential to carefully select the right ones, as not all REITs are created equal. The real estate sector currently pays around 3%, but these seven REITs have significantly higher yields due to their business and financial quality.
Community Healthcare Trust (CHCT) boasts a diversified portfolio of over 200 healthcare properties across 35 states, with a yield of 10.4%. Despite facing some challenges, including tenant flare-ups, the company has delivered 37 consecutive quarters of dividend growth. However, its funds from operations are down below 2020 levels.
Global Medical REIT (GMRE) offers a 10.8% yield and owns 187 off-campus medical office and post-acute facilities, leased out to 275 tenants. While it has faced some challenges, including tenant bankruptcies, the company has been able to sign new leases and acquire properties. However, its dividend payout ratio is relatively tight at 93%.
Innovative Industrial Properties (IIPR) provides capital for the regulated cannabis industry through a sale-leaseback program, offering a 10.8% yield. While it has faced some challenges, including tenant defaults, the company's shares trade at a relatively low multiple of its annualized funds from operations.
Brandywine Realty Trust (BDN) is a hybrid REIT with a mix of properties, including office, life science, and residential spaces. It offers an 11.1% yield and has a stable dividend history, despite reducing its payout by 21% in 2023. However, it faces some challenges in Austin, Texas.
Global Net Lease (GNL) is a commercial REIT operator with a high-yielding portfolio of properties across 11 countries, offering a 15.3% yield. While it has reduced its dividend significantly since 2020, the company is working to bring down its leverage through property dispositions.
New York Mortgage Trust (NYMT) invests in mortgages and other securitized products, offering a 13.7% yield. However, its residential securities have been negatively impacted by rising interest rates, leading to significant declines in its shares and dividend.
Dynex Capital (DX) is an agency-focused mREIT with a high-yielding portfolio of mortgage-backed securities, offering a 14.4% yield. While it has faced some challenges, including declining earnings coverage, the company's leverage decreased in the most recent quarter, positioning it well to benefit from a steepening yield curve.
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