Solid REITs?

[NPV]

Hi everyone,

Thinking about safe liquid investments with reasonable yield, REITs come to mind. In particular, REITs with sustainable payout ratios (dividend/FCF < 100%, dividend/net income <100%), decent dividend yields (>3%), dividend growth consistently above inflation (>2%), minimal leverage (debt/equity <20%), in a growing industry (e.g., yes to healthcare, senior living, no to malls). Ideally larger cap but not necessary.
What are some good examples of REITs that satisfy these criteria? One I have found is PSA, any other examples?

[Chad]

I like OHI a lot. I bought it in my dad's retirement (I manage his money). It pays a high dividend and invests in healthcare real estate, which should do well over the next decade or two as the boomers age. Here is a short analysis to look at:

http://www.suredividend.com/omega-healthcare/

The obvious risk is if something massive gets done with healthcare on the federal level.

Also, payout ratios aren't always a great measurement for REITs. This article gives a brief overview on valuing REITs (not the end all be all):

In estimating the value of an REIT, professional analysts therefore use a measure called "adjusted funds from operations" (AFFO). Although FFO is commonly used, professionals tend to focus on AFFO for two reasons. One, it is a more precise measure of residual cash flow available to shareholders and therefore a better "base number" for estimating value (for example, applying a multiple or discounting a future stream of AFFO). Two, because it is true residual cash flow, it is a better predictor of the REIT's future capacity to pay dividends.

Read more: How To Assess A Real Estate Investment Trust (REIT) http://www.investopedia.com/articles/04 ... z4gfy54pR4
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[cmonkey]

I currently have some funds in SBRA. They have come down nicely over the past few days as they announced an upcoming merger and seemingly reported disappointing earnings, even though they raised guidance. The P/AFFO and yield are nice.

Also have some funds in SNH, but the growth is limited here. It has a nice dividend though.

[ThisDinosaur]

Can this be applied to REIT index funds? I was looking into the Vanguard ex-US REIT fund a while back, because my uninformed brain thinks the US version is expensive. But I can't find the FFO or AFFO numbers for it.

[George the original one]

I'm an OHI fan, too. Their price is more volatile than other REITS and I do believe their growth will be slower going forward.

WPC, O, LTC are others I like. Pick up O whenever you see it fall substantially as it is usually very overpriced for its growth rate. Pick up LTC any time the yield is above 5%.

GOOD has treated me well in the past, but... it's time to review it vs. their holdings and maybe reduce my position because, as you note, malls are fading fast.

[cmonkey]

Pick up O whenever you see it fall substantially as it is usually very overpriced for its growth rate.

Do you have a yield target for O? It has been falling nicely for the past month and I'd like to pick it up. Looks like yield is higher now than it has been in about 3-4 years.

[George the original one]

I bought O in bulk in fall of 2013, under $40/sh. My internet is not being cooperative this morning in looking up what the yield was at that time, but I'm pretty sure it was over 5%... pretty much a once-in-a-lifetime occurrence for O.

[NPV]

Thanks everyone for all the ideas.

[C40]

I just bought some O, OHI, WPC, and SBRA. They all look like pretty good buys right now as far as I can tell (which isn't actually all that far)

Others that looked interesting but that I didn't research as much and didn't buy: VTR, LHO, EPR, GEO, HPT

[OTCW]

I hold REET, VNQ, and REZ in my Roth. All three are REIT ETFs.

[NPV]

What do you guys and gals think about this one? https://www.google.com/finance?q=NZE%3A ... 0ASj4JKYBQ
Not a REIT but an infrastructure fund with similar dividend yield (5%) and limited volatility.

[Rocky]

NLY has done well for me but now may not be the time to buy.