REIT Preferreds: Higher-Yield Without Excess Risk

June 2, 2020 | Hoya Capital

REIT Preferreds: Higher-Yield Without Excess Risk Uncategorized Jun 2 Written By REIT preferred stocks were one of the few places to hide within the high-yield real estate segment amid the violent volatility that rocked REITs during the depths of the pandemic. Exhibiting fixed-income-like investment characteristics, among REITs that offer preferred shares, the performance of these securities has been an average of 17.4% higher in 2020 than their comparable common shares.

Excluding the handful of troubled retail and lodging REITs that have suspended their preferred distributions, dividend yields currently average around 7.0% compared to the 4.7% yield on REIT common stock. Total returns of REIT preferreds have lagged the REIT common stock index, but REIT preferreds have exhibited significantly lower volatility, translated into risk-return ratios roughly on-par with REIT common shares. We introduce our all-new REIT Preferred and Bond Tracker and highlight a handful of our favorite preferred issues.

We also take a look at several ETFs and CEFs that focus on REIT preferreds. To continue reading, click here to visit Seeking Alpha! Comments (0) Newest First Oldest First Newest First Most Liked Least Liked Add Comment --> Preview Edit --> Post Comment… Previous Previous V-Shaped Real Estate Recovery? [Daily Recap] Next Next Who Paid Rent? Landlords Provide REITweek Updates