An adage among real estate investors says, “You can’t make or create any more land,” while you can always build higher, you still need the land. Real estate is one of the best assets most investors are underweighted on. While those who own a home are technically real estate investors, home ownership doesn’t produce any income unless you have rental homes, which can be very capital-intensive, not to mention time-consuming.
One great idea now, especially with the Federal Reserve likely finished with two years of rate hikes, is real estate investment trusts or REITs. REITs are an efficient way to own commercial and residential real estate, and many pay among the best dividends of any asset class.
We screened our 24/7 Wall St. REIT research database, looking for high-yielding companies that pay dependable dividends. We found seven top ideas to offer investors excellent total return potential in 2024.
Arbor Realty Trust
This company trades at a ridiculous 7.3 times estimated 2024 earnings and pays a massive 13.95% dividend. Arbor Realty Trust (NYSE: ABR) invests in a diversified portfolio of structured finance assets in the multifamily, single-family rental, and commercial real estate markets in the United States.
The company operates in two segments:
- Structured Business
- Agency Business
Arbor Realty Trust primarily invests in bridge and mezzanine loans, including junior participating interests in first mortgages and preferred and direct equity, as well as real estate-related joint ventures, actual estate-related notes, and various mortgage-related securities.
The company offers:
- Bridge financing products to borrowers who seek short-term capital to be used in an acquisition of property
- Financing by making preferred equity investments in entities that directly or indirectly own real property;
- Mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower’s equity in a transaction
- Junior participation financing in the form of a junior participating interest in the senior debt
- Financing products to borrowers who are looking to acquire conventional, workforce, and affordable single-family housing
Further, it underwrites, originates, sells, and services multifamily mortgage loans through conduit/commercial mortgage-backed securities programs.
Blackstone Mortgage Trust
With a gigantic 13.22% dividend, this company is run by a Wall Street powerhouse. Blackstone Mortgage Trust, Inc. (NYSE: BXMT), a real estate finance company, originates senior loans collateralized by commercial properties in North America, Europe, and Australia.
The company and its subsidiaries originate and acquire commercial mortgage loans and related investments. It operates as a real estate investment trust for federal income tax purposes.
Ellington Financial
This quality mortgage REIT company is a favorite across Wall Street and pays a massive 15% dividend. Ellington Financial Inc. (NYSE: EFC), through its subsidiary, Ellington Financial Operating Partnership LLC, acquires and manages mortgage-related, consumer-related, corporate-related, and other financial assets in the United States.
The company develops and manages residential mortgage-backed securities (RMBS) backed by:
- Prime jumbo, Alt-A, manufactured housing, and subprime residential mortgage loans
- RMBS for which the principal and interest payments are guaranteed by the U.S. government agency or the U.S. government-sponsored entity;
- Residential mortgage loans
- Commercial mortgage-backed securities
- Commercial mortgage loans and other commercial real estate debt
Ellington Financial also provides collateralized loan obligations, mortgage-related and non-mortgage-related derivatives, corporate debt and equity securities, corporate loans, and other strategic investments. In addition, the company offers consumer loans and asset-backed securities backed by consumer and commercial assets.
EPR Properties
If you want fun in 2024, this top company may own a chunk of the amusement park or property you travel to and pay a fat 7.78% dividend. EPR Properties Inc. (NYSE: EPR) is a leading experiential net lease real estate investment trust (REIT) specializing in select enduring experiential properties in the real estate industry.
EPR Properties focuses on real estate venues that create value by facilitating out-of-home leisure and recreation experiences where consumers spend their discretionary time and money.
The company has total assets of approximately $5.7 billion (after accumulated depreciation of about $1.4 billion) across 44 states. Management adheres to rigorous underwriting and investing criteria centered on key industry, property, and tenant-level cash flow standards. The company believes its focused approach provides a competitive advantage and the potential for stable and attractive returns.
KKR Real Estate Finance Trust
An experienced Wall Street giant runs this company and pays a massive 10.50% dividend. This is a solid idea for more conservative investors. KKR Real Estate Finance Trust Inc. (NYSE: KREF) is a mortgage investment trust focusing primarily on originating and acquiring transitional senior loans secured by commercial real estate (CRE) assets.
It engages in the origination and purchasing of credit investments related to CRE, including leveraged and unleveraged commercial real estate loans.
The company has elected to be taxed as a real estate investment trust. It would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders.
Omega Healthcare Investors
This stock makes sense with an aging population and a significant 9.05% dividend. Omega Healthcare Investors, Inc. (NYSE: OHI) is a REIT that invests in the long-term healthcare industry, primarily in skilled nursing and assisted living facilities.
The company is focused on owning Skilled Nursing Facilities (SNFs). Most of its assets are SNFs, but Omega Healthcare also owns assisted living facilities, specialty facilities, and medical office property.
Its portfolio of investments is operated by a diverse group of healthcare companies, predominantly in a triple-net lease structure. The assets span all regions within the U.S., as well as in the U.K.
The company has increased the dividend paid to shareholders every year since 2003, and the annual dividend growth rate comes in at a solid 4.80%.
Redwood Trust
While also operating in the mortgage business, this company is diversified and pays a hefty 9.70% dividend. Redwood Trust, Inc. (NYSE: RWT) and its subsidiaries operate as a specialty finance company in the United States.
The company operates through three segments:
- Residential Mortgage Banking
- Business Purpose Mortgage Banking
- Investment Portfolio
The Residential Mortgage Banking segment operates a mortgage loan conduit that acquires residential loans from third-party originators for subsequent sale, securitization, or transfer to its investment portfolio. This segment also offers derivative financial instruments to manage risks associated with residential loans.
The Business Purpose Mortgage Banking segment operates a platform that originates and acquires business purpose loans, such as single-family rental and bridge loans, for subsequent securitization, sale, or transfers into its investment portfolio.
The Investment Portfolio segment invests in:
- Securities retained from residential and business purpose securitization activities
- Residential and small-balance multifamily bridge loans
- Residential mortgage-backed securities issued by third parties
- Freddie Mac K-Series multifamily loan securitizations and reperforming loan securitizations
- Servicer advance investments, home equity investments, and other housing-related investments
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