Real Estate Investment Trusts (REITs) have always been one of my favorite types of investment. Very few stocks offer the same share appreciation and dividend payments as REITs.
Take the Vanguard Real Estate ETF (NYSE: VNQ), for example. In 2019, VNQ popped more than 32%. It also paid shareholders a 3.58% yield. Don't forget, that's for an ETF. Picking out the individual REITs poised to break out will yield even higher returns.
And in 2020, outperforming REITs have become even more important. Especially for income investors.
BONUS: REITs aren't just for income investors - we found three REITs set to deliver market-crushing returns in 2020 and beyond. Get the picks for free...
Just yesterday, the U.S. 10-year Treasury yield fell again. Now, it sits at 1.52%.
Those kinds of measly returns simply won't do. How can anyone reach their financial goals by relying on 1.5% over 10 years?
Today, we've found three high-yield REITs to buy and hold through the year. Each of these REITs pays a solid dividend and offers significant profit potential.
Plus, each has recently earned a top score from our proprietary Money Morning Stock VQScore™ System. That means shares are poised to break out.
Here are the top three REITs to buy today...
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Washington REIT (NYSE: WRE) owns 46 properties totaling 4 million square feet in the Washington, D.C., area. It owns a mix of office properties, retail spaces, and multifamily housing complexes.
WRE is growing revenue modestly. It's expected to climb 1.5% in 2020 to $314 million. In 2021, analysts anticipate revenue jumping 5%.
One thing to keep an eye on: WRE should see a significant earnings dip in 2020. At the end of 2019, WRE posted a whopping $4.75 in diluted EPS. That was up significantly from the $0.32 it posted in 2018, and $0.25 in 2017.
But this pop was due to the sale of assets. So we should not expect EPS anywhere near that in 2020.
WRE currently pays a 3.9% yield. Right now, that's good for $1.20 in dividend payments per share annually. And WRE has been rock-solid with its dividend payments. It's dished out $1.20 per share for the last seven years.
WRE also has a 4.9 VQScore.
Vornado Realty Trust (NYSE: VNO) owns properties in some of America's largest cities. Most of its properties are in New York City, but it also owns in Chicago and San Francisco. Many of its properties are office and retail spaces.
One thing that separates VNO from its competition is its dedication to sustainable policies. It boasts more than 23 million square feet of certified LEED (Leadership in Energy and Environmental Design) space.
Revenue is expected to dip in 2020, but only 5%. That's likely part of the reason why VNO stock has pulled back nearly 5% in the last month. But today's buyers are getting a discount.
Analysts do anticipate a turnaround, with revenue expected to jump 4% in 2021.
VNO also pays a solid 4.1% dividend yield. And the company had $1.5 billion in cash and cash equivalents at the end of 2019. So that dividend is stable.
Not to mention, its 4.9 VQScore indicates it is poised for a break out.
Douglas Emmett Inc. (NYSE: DEI) is an absolute cash machine.
Most of the company's properties are office buildings in Los Angeles, but it also develops and manages offices and multifamily properties in Los Angeles and Honolulu.
In 2020, earnings per share are expected to come in at $0.66, according to Ycharts. Incredibly, that will be 106% growth from the previous year. Earnings are expected to jump another 23% to $0.81 in 2021.
Revenue is also expected to climb over the next two years. For 2020, analysts expect 6% growth to $993 million. That should jump another 4% to over $1.03 billion in 2021.
Its yield is smaller, at 2.4%. But DEI's dividend payments have grown every single year since 2010. A decade ago, payouts were $0.40 per share. In 2019, investors were getting $1.06 per share annually.
And with a VQScore of 4.8, DEI shares are poised to break out.
Action to Take: If you're looking to add income to your portfolio, the three REITs listed above are great picks to buy and hold. Buying on any dips and dollar-cost averaging are great ways to make sure you maximize your returns.
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