Franklin Street Properties
5/7 Close: $10.11
Market Cap: $840 million
Franklin Street Properties Corp. (AMEX:FSP) squeaked over the $10 hurdle while I was doing research for this article, but not by much.
FSP is a real estate investment trust, or REIT, like others on this list. As such, it must deliver 90% of its taxable income back to shareholders — meaning big dividends. But FSP isn’t in the mortgage paper business. Rather, Franklin Street owns and leases office properties mostly in the metropolitan D.C. area. The company has seen four straight quarters of revenue growth despite ending an investment banking arm in 2011, though profits admittedly have been thinner. Still, the 19-cent quarterly dividend is very reliable and worth an impressive 7.4% yield.
Volume is pretty low, around 225,000 shares daily, so use a limit order if you trade. Also note that, broadly speaking, commercial real estate hasn’t been exactly in a raging bull market. FSP is off almost 30% in the past 12 months and about 50% in the past five years … but if you’re looking for a long-term turnaround play banking on a recovery in office leasing, you could do worse than FSP.
Jeff Reeves is the editor of InvestorPlace.com, and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at editor@investorplace??.com or follow him on Twitter via @JeffReevesIP. As of this writing, Jeff Reeves did not own a position in any of the investments named here.