3 Top Ranked REITs With High Dividend Yields

Real estate investment trusts, or REITs, specialize in owning or financing income producing real estate. Real estate investment trust businesses are known for their generous dividends which are paid out to investors on a regular basis, something that is particularly crucial with T-bills yielding below 2% for the 10-Year.

However, picking a dependable one is not always so easy as the space is pretty diverse and can encompass a wide range of firms. Below we have highlighted a few REITs that offer up hefty dividends, and could be interesting investments in today’s environment from an earnings perspective too. All three also offer up yields in excess of 3.5%, thoroughly crushing the S&P 500’s 2% yield right now.

Omega Healthcare- (NYSE:OHI)

Omega Healthcare provides financing and capital to the long term healthcare industry. In particular, the company focuses on owning and lending to skilled nursing facilities. The company vigorously evaluates opportunities, trends, and challenges affecting the industry. They search for long term investment opportunities in real estate, and then allow third party healthcare providers to operate within the facilities.

The healthcare industry has had a great run, especially in the past few years. Omega’s success is dependent on the success and profitability of the health care industry. This is a very good thing, as investing in healthcare has generally been very kind to those who’ve given it a chance in the past. In fact, ETFs tracking major healthcare indices, such as (ARCA:XLV) and (NYSE:IYH), are up over 29% over the past 52 weeks.

Omega Healthcare currently holds a Zacks Rank #2. The company has hiked up its quarterly dividend up 1.9%. That adds up for a nice dividend yield of 4.67%. The REIT industry is among the top 20% on Zacks Industry Rank.

Omega Healthcare Investors Inc (NYSE:OHI)-has a trailing twelve month net profit margin of 43.66%, as opposed to -7.32% for the rest of the industry. The company’s profitability is a key component in why they have been able to raise their dividend for ten straight quarters. With their solid profit margins, the company is able to keep a high yield payment to investors.

Omega Healthcare has a proven track record which is building steady returns to investors over time in stock value while increasing dividends. Stay alert and keep an eye on the earnings report which is on out 2/2/15.

Summit Hotel Properties- (NYSE:INN)

Summit Hotel Properties is a REIT that finances and owns…you guessed it, hotels! This company should stand to benefit from the fact that more people are traveling now than ever in the US, according to the US Department of Transportation.

Many people traveling within the US via plane need places to stay. Hotels stand to gain from this trend. It is evident that the Dow Jones U.S. Hotels Index (DJUSLG) has gone up about 27% since this time last year, indicating a lot of growth expectations for the industry.

Summit Hotel Properties holds a Zacks Rank #1. A large part of this is due to the fact that they have beaten our consensus earnings estimate in all of the last 4 quarters! INN posts a beat on earnings by an average of about 9%.

The company delivered its biggest earnings surprise of the last 4 quarters just last quarter, posting a beat of 15.38%. Although the Expected Surprise Prediction for earnings this quarter is 0%, history would suggest that this company may very well surprise this quarter again going into its earnings report on 3/16/15.

Like many other REITs, Summit gives its investors a nice dividend of about 3.5%. That along with its steady stock growth from March of 2012 till now suggests that this is definitely a reliable value stock. Returns on stock value plus nice dividends sounds good to me! Keep in mind that since last week, this stock has upgraded from a Zacks Rank #2, to a Zacks Rank #1.

The positivity backing up this stock suggests a positive outlook for the future of Summit in the short term. However, when you consider the stock’s performance over time, you’ll come to find that this stock has been a very reliable one for about the last 3 years.

Granite Real Estate (TO:GRT_u)

Granite Real Estate Inc. is a REIT that is focused on owning and managing properties, most of which are industrial. They are involved in sourcing, real estate acquisitions, site developing, renovations, project management, long term leasing, and more.

This “do it all” real estate investment trust stands to gain from the market which has picked up considerable momentum from last October right up to now…real estate! In fact, the IShares U.S. Real Estate indexiShares (ARCA:IYR) has gone up about 21% in the last 4 months. Real estate is making headway, which is why REITs such as Granite Real Estate Inc. are great investments to consider.

This stock was a Zacks Rank #3 last week, and since then it has upgraded to a Zacks Rank #1. The company has a trailing twelve month net profit margin of 21.87%, compared to 1.48% for the industry as a whole. The elite profitability of GRT_u is something investors really admire, as much profitability is almost necessary in order to deliver the whopping dividend it offers. Granite Real Estate is currently doling out a dividend yield of 5.54%.

This is pretty large and all the more impressive considering the relative consistent stock performance in the last 3 months. The hefty dividend should help offset volatility this stock may encounter.

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