REITs - Real Estate Investment Trusts - Info & Discussion: Re: REITS vs bonds

» RhyneN - Re: REITS vs bonds

In response to message posted by shallam:

The principal advantage of REIT common stock over bonds, IMO, is that the dividend from the REIT has the potential to increase instead of remaining the same amount.

For example, here are the quarterly dividends paid by several well know REITs. I am showing the "steps" up (or down), not the number of quarters each amount was paid. I am beginning with the first dividend paid in 1998 and continuing thru the last dividend paid in 2001.

AVB 0.51 0.52 0.56 0.64
ASN 0.34 0.35 0.37 0.38 0.41
EQR 0.67 .071 0.76 0.81
BXP 0.41 0.43 0.45 0.53 0.58
EOP 0.30 0.32 0.37 0.33 0.37 .042 .045
AMB 0.34 0.35 0.37 0.40
DRE 0.30 0.34 0.39 0.43 .045
KIM 0.48 0.57 0.60 0.66 0.72
FR 0.53 0.60 0.62 0.66
VNO 0.40 0.44 0.48 0.53 0.60
WRE 0.27 0.28 0.29 0.31 0.33

Note that most of the REITs I show have increased steadily - some at a much higher percentage than others.

Also note, sometimes there is a backstep, for example EOP, the largest office REIT stepped back from 0.37 to 0.33, and then continued up.

I did not show any, but there have been REITs that have passed the dividend when they got in trouble. Meditrust (MT, now LQI) is a recent example of this. There have been others that have made a substantial cut in the level of the dividend when they got in trouble. It is important to buy REITs with good management and to diversify in the REIT group.

-- posted by RhyneN