Baird REIT Dividend Portfolio Offers Safety and Huge Payouts

Even though interest rates have gone up, and the expectations are for more increases this year and next, on a historical basis rates remain near generational lows. That’s very hard on investors that look to dividends and interest income to live on or to supplement retirement funds. Sure there are double-digit yields out there, but the securities and funds that offer those yields bring investors a commiserate amount of risk.

In a new research report, the real estate investment trust (REIT) analysts at Baird are out with their monthly REIT common stock dividend portfolio update. The report listed the requirements from each company to make it into the portfolio:

The criteria for consideration include Outperform-rated shares within Baird’s coverage; Average or Lower Risk suitability; a dividend yield at least 150 basis points or 1.5% above the current 10-year Treasury yield; and an adjusted funds from operations (AFFO) payout ratio for 2018 under 100%.

Nine companies make the cut this month, and all make good sense for income investors looking to find quality dividend-paying stocks without huge risk exposure. Unfortunately, while the stocks are all rated Outperform, Baird did not include price targets in the report. The Wall Street consensus price objectives are included below.


Armada Hoffler Properties Inc. (NYSE: AHH) is a vertically integrated, self-managed REIT developing, building, acquiring and managing high-quality, institutional-grade office, retail and multifamily properties. Investors receive a 5.78% yield. The shares have traded in a 52-week range of $12.66 to $16.01 and were recently seen at $13.85. The consensus price target is set at $15.17.

Health Care

Physicians Realty Trust (NYSE: DOC) investors receive a 6.05% yield. Shares traded at $15.15 early Thursday. The 52-week range is $14.31 to $21.85, and the posted consensus price objective is $17.59.


Apple Hospitality REIT Inc. (NYSE: APLE) owns one of the largest portfolios of upscale, select-service hotels in the United States. Investors are paid a generous 6.67% yield. The shares traded at $17.95 early Thursday, in a 52-week range of $16.72 to $21.90. The consensus price objective is $19.25.

Chesapeake Lodging Trust (NYSE: CHSP) is an owner of hotels and offers a 5.41% yield. Shares traded at $29.60 Thursday morning, in a 52-week range of $22.55 to $29.79. The consensus price objective is $27.29.


STAG Industrial Inc. (NYSE: STAG) offers investors a 5.8% yield. Share recently traded hands at $24.35 apiece, in a 52-week range of $22.42 to $28.85. The consensus target price is $27.73.

Net Lease

WP Carey Inc. (NYSE: WPC) provides long-term sale-leaseback and build-to-suit financing solutions primarily for companies in the United States and Europe. Investors receive a 6.5% yield. Shares were last seen trading at $62.00, in a 52-week range of $59.23 to $72.41. The consensus price target across Wall Street is $65.00.

STORE Capital Corp. Inc. (NYSE: STOR) is the leader in the acquisition, investment and management of Single Tenant Operational Real Estate, which is its target market. Investors receive a 4.94% yield, and shares traded recently at $24.85. The 52-week range is $19.65 to $26.58. The consensus price target is $27.08.

Shopping Centers

Kite Realty Group Trust (NYSE: KRG) offers investors an outstanding 8.51% yield. The stock traded early Thursday at $14.85 a share. The 52-week trading range for the stock is $13.90 to $22.34. The Wall Street consensus price target is $18.55.

Retail Properties of America Inc. (NYSE: RPAI) investors receive a 5.7% yield. The stock was last seen trading at $11.45 a share. The 52-week range is $10.94 to $14.70, and the consensus price target is $15.44.

Nine top companies that all pay dependable dividends and are relatively safe for more conservative accounts to consider. It is important to remember that any of these companies could cut their distributions, and the distributions made may contain return of principal.