Retail investors often make their portfolio decisions based on which stocks can provide the highest yields. Real estate investment trusts usually do just that plus can typically be very liquid means of investing in real estate.
So, here are two of the best REITs around right now that are certainly worth paying attention to:
Chatham Lodging Trust (CLDT)
I’m highlighting Chatham Lodging Trust (CLDT) for investors getting hooked on the high dividend yields of REITs.
This REIT invests primarily in premium-branded, upscale extended-stay and select-service hotels. Chatham Lodging Trust’s portfolio reads like a who’s who of the top hotel chains in the U.S., including Courtyard by Marriott (MAR), Hampton Inn and Suites, Hilton Garden Inn, Hyatt Place and Residence Inn.
Currently, Chatham Lodging Trust is in a joint venture with NorthStar Realty (NRF) to acquire 52 upscale extended-stay and select-service hotels with approximately 7,000 rooms. NorthStar Realty will hold a 90% interest and Chatham Lodging Trust will hold a 10% interest in this joint venture.
In the second quarter, Chatham Lodging Trust’s revenue rose 53.4% to $47.1 million, up from $30.7 million in Q2 2013. Thanks to a $66.2 million gain from the sale of some real estate assets, Chatham Lodging Trust’s earnings surged 2,100% to $64.8 million, or $2.42 per share, compared to $2.2 million, or 11 cents per share year over year.
Excluding this extraordinary gain, Chatham Lodging Trust’s operating earnings were 56 cents per share. The analyst community was expecting operating earnings of 52 cents per share. So, Chatham Lodging Trust posted a 7.7% earnings surprise.
Chatham Lodging Trust will report third-quarter earnings on Nov. 4, and the consensus estimate is for earnings of 69 cents per share on $57.89 million in sales. This would represent 43.8% annual earnings growth and 63.7% annual sales growth. Plus, Chatham Lodging Trust has a 3.7% annual dividend yield.
CLDT shares are thinly traded and should be bought via a limit order, preferably within 10 cents of the previous day’s closing price.
Gramercy Property Trust (GPT)
Since yield-hungry investors are flocking to REITs right now, I’m also discussing Gramercy Property Trust (GPT). The trust specializes in acquiring and managing industrial and office properties throughout the U.S.
Gramercy Property Trust recently announced the acquisition of three industrial properties, totaling approximately 555,000 square feet. Two of these properties are located in the greater Chicago area, while the other is in the Boston area. Gramercy Property Trust also recently bought a $20 million property in Santa Clara, California, and a $17.3 million industrial property outside of Miami, Florida.
In the second quarter, the trust’s revenues rose 26.4% to $20.6 million, up from $16.3 million in Q2 2013. Gramercy Property Trust’s earnings increased to $61.6 million, or 65 cents per share, compared to a loss of $6.7 million, or 11 cents per share. Gramercy Property Trust’s stock also has a nice 2.3% dividend yield.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.