Actionable Conclusions (1-10): Analysts Estimated 17.58% To 34.16% Net Gains By Ten US REITs Come October 2020
Six of ten top dividend-yielding US Real Estate Investment Trust stocks found their way into the top ten gainers for the coming year based on analyst 1-year target prices. (They are tinted gray in the chart below). Thus, our yield-based forecast for REIT stocks was certified 60% accurate by broker target forecasts.
Projections based on estimated dividend returns from $1000 invested in each of the highest yielding stocks and their aggregate one-year analyst median target prices, as reported by YCharts, created the 2019-20 data points. Note: one-year target prices from single analysts were not applied (n/a). Ten probable profit-generating trades projected by brokers to October 2020 were:
Cherry Hill Mortgage (CHMI) was projected to net $341.56, based on dividends, plus mean target price estimates from three analysts, less broker fees. The Beta number showed this estimate subject to risk 58% less than the market as a whole.
Global Net Lease, Inc. (GNL) netted $284.05 based on a median target price estimate from three analysts plus dividends, less broker fees. The Beta number showed this estimate subject to risk 29% less than the market as a whole.
Dynex Capital, Inc. (DX) was projected to net $264.54, based on dividends, plus target price estimates from four analysts, less broker fees. The Beta number showed this estimate subject to volatility 37% less than the market as a whole.
Hersha Hospitality Trust (HT) was projected to net $251.81 based on dividends, plus the median target price from estimates by eleven analysts, less broker fees. The Beta number showed this estimate’s risk 33% over the market as a whole.
Sotherly Hotels Inc. (SOHO) was projected to net $236.17, based on dividends plus a median target estimate from two brokers, less broker fees. The Beta number showed this estimate subject to risk 27% less than the market as a whole.
AG Mortgage Investment (MITT) made the list with a projected net gain of $224.01, based on the median target price estimate from four analysts, plus their estimated annual dividend, less broker fees. The Beta number showed this estimate subject to risk 8% under the market as a whole.
Ellington Residential (EARN) was projected to net $217.01, based on target price estimates from two analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk 22% less than the market as a whole.
Annaly Capital Management (NLY) was projected to net $190.95, based on dividends, plus a median target price estimate from ten analysts, less broker fees. The Beta number showed this estimate subject to risk 60% less than the market as a whole.
Exantas Capital Corp. (XAN) was found to net $188.92 based on the median target price estimate from three analysts plus dividends, less broker fees. The Beta number showed this estimate subject to risk 25% less than the market as a whole.
AGNC Investment Corp. (AGNC) was projected to net $175.78, based on a median target estimate from twelve analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk 74% less than the market as a whole.
The average net gain in dividend and price was estimated at 23.75% on $10k invested as $1k in each of these ten stocks. This gain estimate was subject to average risk 23% under the market as a whole.
The Dividend Dogs Rule
Stocks earned the “dog” moniker by exhibiting three traits: (1) paying reliable, repeating dividends, (2) their prices fell to where (3) yield (dividend/price) grew higher than their peers. Thus, the highest yielding stocks in any collection became known as “dogs.” More precisely, these are, in fact, best called “underdogs.”
50 Top US REITs By Target Gains
Top 50 US REITs By Yield
Actionable Conclusions (11-20) Yield Metrics Ranked 10 Top US Monthly REITs
Top ten US Real Estate Investment Trusts of September as selected 10/4/19 by yield represented four of seven constituent industries.
The first of three residential REIT industry representatives in the top ten took the lead, New York Mortgage Trust, Inc. (NYMT) . The other two residential members placed third, and seventh: Cherry Hill Mortgage Investment Corp. ; AGNC Investment Corp. .
The first of five diversified REITs placed second, Western Asset Mortgage Capital Corp. (WMC) . Following were the remaining four of the diversified squad in fourth, fifth, and eighth and ninth places: Dynex Capital Inc. ; AG Mortgage Investment Trust ; Invesco Mortgage Capital Inc. ; Annaly Capital Management .
Lastly, two lone representatives from the health and office REIT industries placed sixth and tenth: The GEO Group, Inc. (GEO) ; Global Net Lease Inc. , to complete the top ten October US REITs by yield.
Actionable Conclusions: (21) Top Ten US REITs Reported 8.55% To 22.66% Price Upsides To October 2020; (22) Three Downsides Ranged -2.48% To – 9.13% Per Broker Target Reckoning
USR (5) Upside OC19
To quantify top dog rankings, analyst median price target estimates provided a “market sentiment” gauge of upside potential. Added to the simple high-yield “dog” metrics, analyst mean price target estimates became another tool to dig out bargains.
Broker Targets Indicated A 6.56% Advantage For 5 Highest-Yield, Lowest-Priced US REITs To October 2020
Ten top US REITs were culled by yield for their monthly update. Yield (dividend/price) results verified by YCharts did the ranking. The list was limited to stocks reporting better than -15% total annual returns.
As noted above, ten Real Estate top gainers selected 10/4/19, showing the highest dividend yields represented four of seven industries constituting the REIT sector.
Actionable Conclusions: Analysts Charted 5 Lowest-Priced Of the Top Ten Highest-Yield US REIT Dogs (23) Delivering 22.06% Vs. (24) 20.7% Net Gains by All Ten, Come October 2020
$5000 invested as $1k in each of the five lowest-priced stocks in the top ten REIT kennel by yield were predicted by analyst 1-year targets to deliver 6.56% more gain than $5,000 invested as $.5k in all ten. The fourth-lowest priced Real Estate top yield equity, Cherry Hill Mortgage Investment Corp., was projected to gain 34.16%.
The five lowest-priced top yield US REITs as of October 4 were: New York Mortgage Trust Inc.; Annaly Capital Management; Western Asset Mortgage Capital Corp.; Cherry Hill Mortgage Investment Corp.; Dynex Capital Inc., with prices ranging from $6.05 to $14.75.
Five higher-priced WallStar REITs were AG Mortgage Investment Trust; Invesco Mortgage Capital Inc. (IVR); The GEO Group Inc.; AGNC Investment Corp.; Global Net Lease Inc., whose prices ranged from $14.83 to $19.42.
The distinction between five low-priced dividend stocks and the general field of ten reflected Michael B. O’Higgins’ “basic method” for beating the Dow. The scale of projected gains based on analyst targets added a unique element of “market sentiment” gauging upside potential. It provided a here-and-now equivalent of waiting a year to find out what might happen in the market. Caution is advised, since analysts are historically only 20% to 80% accurate on the direction of change and just 0% to 20% accurate on the degree of change.
The net gain/loss estimates above did not factor in any foreign or domestic tax problems resulting from distributions. Consult your tax advisor regarding the source and consequences of “dividends” from any investment.
Stocks listed above were suggested only as possible reference points for your United States Exchange Real Estate Investment Trust stock purchase or sale research process. These were not recommendations.
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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, recommendation or endorsement to buy or sell any security. Prices and returns on equities in this article except as noted are listed without consideration of fees, commissions, taxes, penalties, or interest payable due to purchasing, holding, or selling same.