While conventional wisdom has it that it is more often the larger companies that can afford the luxury of rewarding and luring in investors with healthy dividends, REITs are designed with high dividend payouts in mind, and thus even the small-caps in this sector offer impressive yields.
A Real Estate Investment Trust, or REIT, is a security that is sold in the same way as a stock. REITs invest in real estate directly via properties and mortgages and benefit from special tax exemptions. Some REITs focus on a certain type of real estate (commercial, residential, industrial) or a specific region, state, or country. REITs are known for their typically very high dividend yields.
There are currently six REITs offering yields over 10 percent, whose shares have gained over 10 percent year-to-date for 2013.
New York Mortgage Trust Inc. (NYMT) – With a market cap of $359.47 million, and shares trading at $7.24, New York Mortgage Trust invests in assets such as residential mortgage backed securities (RMBS), prime adjustable rate mortgage loans (ARM), and commercial mortgage backed securities (CMBS). NYMT currently has an annual dividend yield of 14.92 percent, with shares up 18.69 percent in 2013.
American Capital Mortgage Investment (MTGE) – Up 14.24 percent so far this year, American Capital Mortgage Investment is a diversified REIT managing a leveraged portfolio of mortgage-related investments. With a market cap of $250.18 million, and shares at $26, MTGE’s annual dividend yield is currently 13.85 percent.
AG Mortgage Investment Trust (MITT) – AG Mortgage Investment Trust is a diversified REIT that invests in real estate, residential securities and mortgage assets, as well as financial assets. Its market cap is $677.96 million, with shares currently at $24.68 and an annual dividend yield of 12.97 percent. AG Mortgage is up 8.39 percent in 2013.
Apollo Residential Mortgage (AMTG) – The residential REIT has a market cap of $672.61 million, with shares at $21.69 and a 10.89 percent gain for the year. Apollo manages residential mortgage assets throughout the U.S. and has an annual dividend yield of 12.91 percent.
Resource Capital Corp. (RSO) – Resource Capital specializes in commercial real-estate assets and some commercial finance assets. RSO has a market cap of $693.62 million, with shares are $6.42, and an 18.23 percent gain on the year. The company’s dividend yield is 12.46 percent.
Dynex Capital Inc. (DX) – Dynex is an REIT that invests in mortgage loans and securities, with a market cap of $566.27 million, and shares at $10.44. Up 13.60 percent this year, DX has an annual dividend yield of 11.11 percent.
