Real Estate Investment Trusts (REITs) represent a solid industry for investors to add to their portfolios. Investors can gain exposure to the real estate market without the upfront cost of purchasing a home or other types of real estate. Also, REITs offer the ability to receive impressive income generation through very high dividend yields. REITs are legally required to distribute at least 90% of its taxable income yearly to investors, primarily in dividends.
So, let’s explore a few REIT options that meet that can provide investors with potential upside.
NewLake Capital Partners (NLCP)
NewLake Capital Partners (OTCMKTS:NLCP) is a triple-net lease industrial REIT. It provides real estate for legally operating cannabis companies. It owns roughly 31 properties, including cultivation and dispensary facilities.
Over this past year, NLCP’s share price has begun to spike again. That follows a substantial drop-off from its IPO in August 2021 and following into early 2023. Over the last six months, share price has risen by 57%. This is primarily due to growing revenue, a dividend yield increase and the fact that it collected 100% of total rent within the last quarter.
Further, NewLake Capital’s annual dividend yield is 8.24%. The most recent quarterly distribution to investors was 41 cents per share on April 15. Also, the firm has been experiencing dividend growth for the last two years.
On March 11, NLCP reported earnings for Q4 of 2023, in which it stated that revenue increased by 7% and net income rose by 4% compared to the previous year.
NewLake Capital is growing fairly rapidly, especially over the last several months. NLCP is a much greater financial position than a couple of years ago. And with consistent growth, this could be an income generation and share price appreciation stock that should excite investors.
Rithm Capital (RITM)
Rithm Capital (NYSE:RITM) is a mortgage REIT primarily composed of mortgage servicing rights and mortgage loan origination. In addition, it performs asset management services.
Over this past year, its share price has risen by 47%, primarily due to consistent revenue growth.
On April 30, Rithm Capital reported earnings for the first quarter of 2024, stating that total revenue increased by 94% compared to Q4 2023. A net loss of $67 million was reported for the fourth quarter of 2023. However, for the first quarter of 2024, it increased to a net income of $287 million.
RITM offers investors a dividend yield of approximately 8.83% on an annual basis. The most recent quarterly distribution was 25 cents, which was distributed to investors on April 26.
Its overall revenue increased massively from the previous quarter, primarily due to an increase in net servicing earnings. That had increased by $16 million to $554 million quarter-over-quarter (QOQ). Finally, the company offers investors strong growth metrics within the mortgage servicing industry as well as a solid dividend yield.
VICI Properties (VICI)
VICI Properties (NYSE:VICI) is an experiential REIT that owns and operates an extensive portfolio of gaming and entertainment locations. Most notable is VICI’s prime real estate on the Las Vegas Strip via the MGM Grand, Caesar’s Palace Las Vegas and The Venetian Resort.
On May 1, VICI announced earnings for Q1of 2024. Total revenue increased by 8% and net income rose by 14% year-over-year (YOY). VICI reiterated its growth projection for the remainder of 2024, expecting Adjusted Funds From Operations (AFFO) to be within the range of $2.3 billion to $2.4 billion.
Over the past year, its share price has decreased by 10%, even following decent earnings growth and increased investment in The Las Vegas Strip.
Also, VICI Properties offer a robust dividend yield of 5.76% on an annual basis, with five consecutive years of dividend appreciation. Its most recent distribution was 42 cents per share, paid to investors on April 4.
VICI Properties could be a solid value buy within the REIT industry with potential upside for investors. But, with a solid dividend yield and strategic reinvestment in its properties, it’s a great addition to a portfolio focused on income generation.
As of this writing, Noah Bolton held a LONG position in RITM. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
