4 High Yielding REITs To Consider

By Robert Gordon By law, REITs are required to pay not less than 90% of earnings as dividends to shareholders. Since dividends are typically paid out of free cash flows (FCF), the dividend payout often exceeds the stated earnings of many REITs. In the following article, I will look at the four REITs that I think are the most solid from an FCF standpoint and could provide the most stable income among REITs for investors. Annaly Capital Management, Inc. (NLY) Annaly is among the largest, best known, and most successful REITs out there today. It specializes in mortgage related, usually government backed debt. Annaly stock was trading recently at almost $17 per share. Its 52 week range is from $18.79 to $14.05, and it is trading at a price to earnings ratio of 12.3. It has a market capitalization of $16.2 billion, and paid over the course of 2011 a total dividend of $2.28, for a suggested yield at today’s price of 13.77%. Annaly is struggling by its own standards due to the yield curve. Long term mortgages rates have declined to historic lows, prepayments of higher yielding mortgages are common place, and short term rates have gotten to about…