Real estate trusts, or REITs, offer some of the highest yields around, and for good reason. They’re legally obligated to pay shareholders 90% of their earnings as dividends.

But, like most things in the stock market, high yields don’t necessarily mean suitable investments. Not all REITs are created equal; some might be investing in the wrong piece of real estate, some might be on the hook for property that’s falling in value, while some might be contending with high vacancy rates and moth-eaten properties. 

So, today, I decided to take a look at the REITs being traded in the stock market to see which ones offer the highest yields with the best prospects. 

How I Came Up With The Following Stocks

Using Barchart’s Stock Screener tool, I selected the following criteria to narrow down my search: 

• Number of Analysts & Current Analyst Rating: 12 (High) and up, and 4 (Moderate Buy) to 5 (Strong Buy). This combination of filters gives me an idea about what Wall Street thinks of the REITs. Limiting the search to only the higher-value options ensures that I get well-covered stocks that analysts like.
• Annual Dividend Yield: Left blank so I can use them to arrange the results.
• Market Capitalization: 10 billion and above. I searched through companies with higher capitalization, as they tend to be less volatile, and their businesses are more stable.
• Watchlists: REITs. I keep several watchlists on Barchart, allowing me to search through different sectors, company classes, etc, quickly. 

With the filters set, I ran the search and got 17 results, which I arranged from highest to lowest yields with a click of a mouse: 

Let's discuss the top three: 

Annaly Capital Management (NLY)

Annaly Capital Management primarily invests in mortgage-backed securities and other real estate-related assets. The company generates income through interest rate spreads and actively manages its portfolio to optimize shareholder returns. The company invests in residential credit and mortgage servicing rights (MSRs), with most of its investments allocated to its subsidiary, the Annaly Agency Group, which invests in highly liquid mortgage-backed securities. 

NLY stock has  been doing quite well recently, up 13.06% YTD, and despite that, Annaly offers some of the highest yields in the market, with its latest quarterly payout coming in at 65 cents a share. Annually, that works out to $2.60, which translates to an impressive 12.57% yield. 

In my view, Annaly is a stable, consistent, double-digit-yielding REIT with a high moderate buy rating at a 4.14 average score - how can you beat it? 

Gaming & Leisure Properties (GLPI)

Gaming & Leisure Properties specializes in owning and leasing casino properties. The company operates a substantial gaming and casino real estate portfolio that comprises 65 premier gaming properties across 20 states, including Caesars Entertainment, Bally’s Corporation, American Racing and Entertainment, and more. Even as GLPI bears significant exposure to the gaming and casino markets, it mitigates the risks by triple-net leasing its properties and has expressed plans to expand its investments outside gaming. 

Gaming & Leisure Properties pay 76 cents quarterly, translating to a $3.04 annual rate and a 6.19% yield. Though its yearly payouts fluctuate, they don’t stray far from the $2 - $3 level, which can give a sense of stability to interested income investors. 

Healthpeak Properties Inc (DOC)

Last on the list is Healthpeak Properties, a REIT operating in the healthcare sector in areas that include life sciences, laboratories, outpatient offices, medical offices, and senior housing. Its portfolio includes the TriStar Centennial Medical Center in Tennessee and the Regency Oaks retirement community in Florida. The REIT is an S&P 500 component and owns over $20 billion of real estate assets. 

DOC stock has the highest analyst scores on this list, with an average rating of 4.37 or a moderate buy recommendation. Meanwhile, the company pays impressive dividends, $1.20 per share, per year, which translates to a 6.12% yield. 

Final Thoughts

REITs can be a great way to invest in real estate without physically buying properties for yourself. These companies typically offer higher yields than your standard dividend stocks and should always be in anyone’s income or retirement portfolio. However, not all REITs are created equal, so you should always consider what Wall Street thinks and other factors like business longevity, dividend consistency, capital appreciation, and more. I’m always happy to help and point you in the right direction but remember: it is your money and responsibility to conduct proper due diligence before investing in anything.