3 REITs Hit New Highs, Pay Over 3% Dividends

These 3 real estate investment trusts hit new highs this week and each pays a dividend above 3%: Sabra Healthcare REIT, CareTrust REIT and InvenTrust Properties. They all continue to rise despite the recent trend of most REITs, as measured by benchmark ETFs, continuing to fall.

Real estate investment trusts are designed to allow investors to participate in the potential increase in value of the buildings and land they own, while paying dividends on these income-producing properties. There are many challenges and differences between REIT types, but that’s the basic concept.

First, take a look at the falling prices of exchange-traded funds that invest heavily in the sector. Here is the daily price chart of the iShares American real estate ETF which holds a diverse selection of 73 REITs in its portfolio and is generally considered a benchmark for the entire group:

Note how the early October low has fallen below the March low, a sign of weakness for the ETF. It has rebounded from this month’s low of $75, but until it gets back above the downtrending moving averages, it’s a bearish look for this rate-sensitive sector of interest.

REIT with new 52-week highs:

Sabra Healthcare REIT invests in managed senior living communities, skilled nursing facilities and other health care-related properties. Bank of America
BAC
Last week, securities raised their view on Sabra from “neutral” to “buy” with a price target of $14 to $16. The REIT pays a dividend of 8.46%.

CareTrust REIT manages a portfolio of skilled nursing facilities as well as senior living facilities such as assisted living centers. There are no profits this year but analysts expect 53% growth next year. CareTrust offers investors a dividend yield of 5.23%.

InvenTrust Properties is a retail REIT that invests in open-air shopping centers, primarily in the South and South West. Profits are down 90% for this year, but analysts estimate the company will post 171% growth for next year. InvenTrust pays a dividend of 3.31%. The daily price chart is here:

It has been better and wiser in recent times in this industry to be very selective rather than very diverse.