DCT Industrial Trust
Market Cap: $1.5 billion
YTD Performance: +20%
DCT Industrial Trust (NYSE:DCT) is another REIT like Franklin Street Properties. But instead of playing the commercial real estate game, DCT owns and operates distribution and light industrial properties located around highways in the United States and Mexico.
Collecting rent on truck warehouses is hardly a sexy enterprise, but it certainly is a stable one. DCT pays a reliable 7 cents quarterly, good for a 4.6% yield, and has paid that amount since 2009 when it cut its dividend because of the economic downturn. Its revenue is stuck in neutral at around $250 million annually, and the stock is struggling to break even. It also has bled through some of its cash lately. However, DCT is riding six straight quarters of year-over-year revenue increases and is narrowing its losses to only a few pennies per quarter. Things aren’t perfect, but the dividend is nice and could move up if and when a secular recovery boosts trucking traffic and the logistics business.
Judging by revenue trends and the gains so far in 2012, DCT seems to be firming up. And if it just drifts sideways for a year or so before it kicks into high gear? Well, the decent yield is a nice sweetener.
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at email@example.com or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.