Buying the Blue Chips: Blue Chip REIT’s (Quality over Yield All Day Everyday)


welcome to Jamaica investing my name is
Jason thanks for tuning in today I’m starting a new series called buying the
blue chips and today’s focus will be on real estate investment trusts also known
as REITs and I’m doing this series because I hear
a lot of dividend investors that on social media on YouTube recommending or
buying into different categories of stocks for dividend yield when in
actuality every every sector and every category of stock there are blue chips
and so and that also holds true in REITs so rather than chasing yield chase blue
chips so that’s what this series is going to be about and so today like I
said the this particular blue buying the blue chip addition is REITs let’s get
into it oh yeah like the Hat a couple warning bad boys so got a
little bit of swag right take a peek they kind of messed up on the
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okay guys so let’s go ahead and jump into this this slide deck here so
there’s we’re gonna cover and try to do it pretty quickly I’m not going to go in
depth this is an in-depth stock analysis this is gonna be just more high-level on
and just give you something to chew on some companies to chew on that I believe
and you can see for yourself that are blue blue chip real estate investment
trusts companies there are a total of about there are a total of 13 that I’m
covering here for from a group one block just because they’re very very
similar so but altogether thirteen companies and I was looking at it and
it’s better if I get out of the way in the video so I’m gonna remove me so I
can go through the slide and my head not be in the way so just wanted to maybe
give just give a little bit of overview of REITs if some of you may not be
familiar with REITs REITs are obviously as I’ve said a couple times realist real
estate investment trusts so here’s a few facts about REITs and the in the far
left REITs most reads typically pay out all of their taxable income as dividends
to shareholders and turn shareholders paid the income taxes on those dividends
so reap dividends once you receive them they come in as ORDINARY INCOME (not Qualified Dividends) and
that means that you got to pay income taxes on those dividends so in until
you’re making twenty thirty thousand dollars in dividends a year which would
you know take a huge portfolio then shouldn’t be too much to be concerned
with but the I guess the idea of optimal way is to obviously have tax sheltered
you know IRAs to invest in or just you know that there will be taxes on the
dividends but it goes for all dividends essentially until you get hold them over
a year with regular stocks that still qualified dividends but so to be a REIT
REIT qualifications and I’ll put a star here because this is not all of the
qualifications I actually have a slide the next slide will have all over and
I’m not gonna spend a lot of time on it but I figured I would for you you all
who maybe don’t know all the details about REITs this is a little info for
you so they invest at least seventy five percent
invest at least 75% of his total assets in real estate so it has to have has to
do that and it has to pay at least 90% of his taxable income in the form of
shareholder dividends each year okay so they pay it goes back over here they
essentially pay out all of their taxable income and you pay taxes on their
taxable income but that that’s part of the deal they they live to pay you to
make make make make you money essentially so a lot of people don’t
know that REITs or you know so there’s there’s
different sectors of stocks there’s also different sectors of REITs so you can be
pretty well diversified just investing into REITs so here are the different
sectors that and this came off of the in a REIT calm which means an index that
tracks like the sp500 tracks the top 500 companies in a Reid tracks the all of
the reads so there are data data centers diversified sector healthcare sector
industrial sector infrastructure sector lodging resorts mortgage office
residential retail self storage specialty and timber timber lands which
are like wooded areas you know you lease out the land to for logging and
different things like that so there’s all kinds of different types of REITs so
it’s not just apartment buildings and commercial real estate properties okay
here are all of the qualifications as I said I’m not going to go over each one
of these bullet points but these all these have to be in play have no more
than 50% of it shares held by five or fewer individuals and all of that so if
you want to pause the video take a look at that so that covers what REITs are my
REIT number one blue chip number one is WP Carey the ticker symbol is w PC so W
Karry is a global triple net lease REIT and they have near 900 properties in 17
countries this is one of the most diversified triple net lease REITs that
there is and I put the note here for if you did you don’t know what a triple net
lease is a triple net lease triple net or sometimes they show up it looks like
in in in is a lease agreement on a property where the tenant or lessee
agrees to pay all real estate taxes building insurance and maintenance on
the property in addition to any normal fees that are expected under the
agreement so essentially WP carry in 17 countries has 900 properties all they
really did was buy the building’s the people that leased these out these 900
properties they managed at all including having their own insurance and
maintenance the Vieux Carre does not pay for any of that they they have people
paying them rent and maintaining the building paying real estate taxes the
whole nine yards so they have a vested interest in these facilities and
buildings it’s not just a 5-year deal get in get out go get another they’ve
spent a lot of time and money in them so the integrity carries one of the larger
REITs and let’s look at their chart this is
what a REIT blue-chip chart looks like some and I bring this up to say look at
look at charts of these and compare them to these high yielding 10 8 8 9 10 11
percent REITs that you’re considering and you
may want to reconsider because you may just look at the trend this guy I mean
since 2000 imagine just continuing to reinvest dividends and
at this high peak level that this at right now Devon few carry still paid
he’s a dividend of almost five percent and so it’s just uh and if you in look
like I said if you if you bought it and you just kept reinvesting dividends out
of five ten maybe back here it was you know six seven eight percent clip I mean
you would have made a whole lot of money on a company like this and so you can
see the dividend summary down at the bottom we have the annual yield four
point eight percent payout four dollars payout ratio very low very manageable
eighty percent five-year growth rate dividend growth rate of three point
eight five percent and they’ve been growing their dividends for eighteen
years so that is a blue chip okay that’s what
it looks like this in case you were wondering well as you’re you’re
searching out the year REITs and don’t chase the he’ll chase blue chips read
number to read blue chip number tooth Realty income the dividend paying REIT
so them are the monthly dividend paying wreaked so again rift income is a triple
net lease REIT with the income corporation is a real estate investment
trusts that invest on freestanding single tenant commercial properties and
the US and Puerto Rico that are subject to in and in triple net leases and then
I made a note that they recently acquired twelve properties in Europe so
they’re mostly a us very very diversified in the US and Puerto Rico
with lots and lots of properties and like as I said they pay monthly dividend
one of the rare monthly dividends and they are branching out to now other
countries here’s their chart which looks eerily similar to WP Carey because they
are both blue chips so they have a little bit lower yield
and their price has been on just a tear since this time frame here so about
three point seven seven six percent and you will pay out up to two dollars and
seventy two cent payout ratio of ninety two point seven six and for some reason
the five-year growth rate isn’t showing up I think I found it and saw it it’s
like four four percent or so three or four percent they’re little little
slower because they’ve been they are now a dividend aristocrat that has been
growing their dividends for 25 straight years alright let’s move to reap blue
chip number three and that is Simon Property Group ticker symbol SPG so SPG
is a high-end mall REIT so they invest in mall are they all malls and lease out
space and malls and they’re one of the few reasons overall to possess the
highly coveted a credit rating very very very good stable company as a lot of
retail retailers have taken a hit because Amazon and all of the e-commerce
now but these guys are a blue chip and they’ve been through it before
and so you can see their share price a little on high-end 162 could you imagine
if you bought it way back in oh five or even down after the this was after the
mortgage crisis Oh 809 way down here you you know you would have doubled tripled
your money without any dividends and so they’re there at current dividend yield
is very good that four point nine four percent they have a very low pay out
ratio for REITs at and so there’s a sixty nine percent five-year growth rate
of twelve point five six percent which is very good double-digit five-year
growth rate and they’ve been growing a dividend for nine consecutive years the
what’s going to number four bucho treat number four is EPR property
ticker symbol obvious enough EPR so EPR properties is kind of unique as you can
see over on the right you uniquely invest in three primary segments
segments I’m sorry entertainment recreation and education they kind of
don’t go together but it’s kind of unique kind of diversify them and so
entertainment and recreation or sort of cyclical and kind of you know go with
the weather where education is very solid very you know very stable and so
that I think they invest mostly in charter schools so the company owns
amusement parks theaters schools and ski resorts and they like Realty income or a
monthly paying dividend stop here’s their chart which looks very very very
good and their yield current dividend yield at current prices is five point
seven nine percent and you can see the parrot ratio is is very manageable
eighty-eight percent five-year growth rate of 6.46% and they have been growing
their dividends for nine years moving on to blue chip REIT number five
it is a miracle ticker symbol C o LD cold so they are a global cold freezer
storage company so think about these grocery stores and food providers and
restaurants that have produce that they need to have on hand these America owns
warehouses that are refrigerated and or freezers or frozen and so they can keep
and they have them they have them located regionally and positioned around
you know metro areas places that these all of these brochures
and restaurants can utilize them to store excess and overflow and they lease
out parts of their warehouse to these companies so it’s pretty neat
and and as I said I didn’t really say but they’re they’ve grown into a
monopoly because they’ve acquired essentially everybody in the all the
competition that they’ve acquired and take a look at this so but cold is only
a year and a half old or not a year and have old they’ve been a company for a
long time but been public only a year and a half so it’s very little known
reach and so there’s their chart for a year and a half
they’re up ninety two percent if you were to bought in I think it’s like
$17.75 when it IP owed and the current price share price today was thirty three
dollars and seventy nine cent and there’s just a beeline straight up their
chart so yeah pretty interesting company here so people and there’s a there’s a
if you go on seek an alpha there’s just one guy who writes he’s written five
articles on seeking alpha and that’s all he’s not written any more articles and
all those have been batching cold and it’s just like it makes no sense and
then I think if you read his bio he was a competitor I think or something like
that so so if you don’t seek an alpha dis ignore that guy’s articles I mean he
says how can they there’s really no growth left with cold but cold is
expanding and they’re in Australia New Zealand other countries and they’re
gonna continue that and so they they grow by acquiring so grow through
acquisitions so enemy and as the industry grows you know more online
shopping and things even food so there is definitely room to grow oh yeah so
their chart you can see at the bottom and doesn’t it shows one one
year of dividend growth and a lower yield because the price the stock price
has literally be line and they haven’t been able to keep up with raising the
dividend fast enough so yeah I mean so that’s the this next chart here shows
that in a year and a half they’ve raised their dividend already twice they just
trying to keep up with the stock price I mean and so it’s pretty amazing so
here’s a blue chip read number six I believe I’ll have to go back and check
this out make sure I’m on the right number but American tower ticker symbol
AMT they are a global read that focuses on leasing out communication sites and
major telecommunication companies last year eighty eighty-eight percent of
American towers US property segments revenue was derived from AT&T Verizon
t-mobile and Sprint so there you go so pretty pretty safe I would say and with
the expansion of 5g you tell me what you think if you think this company’s going
to continue to grow here’s their chart I mean you can see
obviously so these guys will benefit greatly from the 5g build out the
infrastructure build out because I don’t know if you’ve really been following
that very closely but they’re also going to also continue building out the 4G LTE
as these cellphone providers will sell those or sell their 4G LTE or lease out
their 4G LTE services to companies like you know cricket and all these companies
that you actually use other providers of wireless network you know so that’s how
that works but I mean you can take a look I mean their dividend yield is 1.6
percent again this is similar to and we’re cold because the stock prices went
went up so so fast that it’s way outpaced the dividend yield but if you
bought if you bought back here would you care that
dividend yield of 1.6% I mean they’re trying to keep up there isn’t it
23% five-year growth rate and they’ve been raising dividends to at 23% clip
and they’ve been raising it for seven years so that’s the thing if you if you
only look at yield your mewed hundred percent missing the big picture of
dividend investing because dividend investing is getting in companies where
you can watch the dividend grow over time and watch the stock price grow if
you get in these these companies that are risky and are not very well managed
or well-run and they’re not blue chips the stock price is going to be like this
and you’re only relying on dividends but you’re losing money so that’s American
Tower and so the other big player in this same industry is crown Castle
ticker symbol CCI and if I’m if my math is right then this would be blue chip
number seven crown Castle International Corporation owns operates and leases
more than forty thousand cell towers and approximately seventy thousand route
miles of fiber so they have a fiber network supporting small cells and fiber
solutions across every US every major US market the company’s headquartered in
Houston Texas here’s their beeline straight up shot as well and their
dividend yield is three point three percent and and so there that payout
ratio has got to be wrong I don’t know I didn’t research that but they’ve also
been growing their dividend dividends for five years and for some reason their
five-year growth rate didn’t wasn’t coming up on seeking alpha but these
guys are a blue chip just like American Tower all right so blue chip number eight is
the one and only mortgage REIT also known as M REIT so that is Arbor Realty
ticker symbol a so Arbor Realty Trust is a nationwide
real estate investment trust and direct lender providing loan origination and
servicing for multifamily seniors housing healthcare and other diverse
commercial real estate assets as an approved FHA multifamily accelerated
processing lender Arbor provides access to flexible FHA multifamily loan
programs on an expedited basis and financing for acquisitions refinancing
moderate rehabilitation substantial rehabilitation or new construction
so essentially Arbor Realty is all of the even though they’ve sort of went and
went by the wayside or they’re in the backdrop Fannie Mae Freddie Mac they’re
still in business still still still originating government loans government
back loans so Arbor is one of the biggest players in the loan origination
of fannie freddie and FHA loans and here is so I will go ahead and caveat this
this was the so mortgage REITs it’s all about mortgages so the mortgage crisis
is this dumped off here and they’ve fought fought their way all the way back
and have been on a very nice that’s what I didn’t want to hide this I didn’t want
to start it in the oh nine and so you couldn’t see it but but the reason it
shouldn’t concern you was because this was a mortgage crisis that’s why this
fell off as it did but they’ve been on a very good and actually on a really good
discount or it’s becoming a discounted a good entry point right now and they have
a very high yield because all mortgage REITs do in this category is the other
ones I like to call trash stocks like a GNC nrz IVR I’ve yards not bad not as
bad as the to that I just mentioned but Arbor in
mortgage REITs they’re really only a couple that would even be considered
star award properties as another mortgage REIT that is pretty good but
there’s a lot of it’s just so much high risk to you know in this space to do
what these guys want grow their dividends for seven years and have a
five-year growth rate of growing dividends at fourteen percent at the
dividend yield that they do so they have that kind of dividend growth so it just
shows you the how well this companies run and I will say one more look thing
about mortgage REITs that if interest rates are cut then they they will grow
because mortgages will be getting refinanced and people you know because
interest rates will be lower so so if if what does expect thing to happen happens
you know if the Fed cuts the interest rate Arbor will go through the roof so
just keep that in mind number nine is I mean this is a big boy
right here so this is I don’t even know how to pronounce it correctly Equinix I
think it could be I don’t know but Equinix inc ticker symbol EQI X so they
are a global data center read today that basically lease out data leased out
storage space in data centers for cloud based businesses and or or enterprise
businesses right so but the one that what sets these guys apart from the
other group of data center REITs is that these guys have a global interconnected
system of data centers it’s unreal what these guys got going on
and let’s take a look at you can just see the chart so this is a chart looks I
mean they were stock price that current is over five hundred dollars five
hundred and ten dollars I mean imagine if you had a ball at in 2012 at around
you know 2010 at around 100 bucks you literally it would have been a five
bagger without dividends they were growing the dividends for four years at
current and their dividend yield it’s one point nine four percent so yeah so
they are the the biggest player in the data storage you can see their market
cap is 42 billion but the reason the reason they are the big boy is because
they have the the global global exposure and it’s not only just global all of
their data centers are interconnected so and then the grouping of all of the rest
of the US data centers some of these in this that I grouped here have a little
bit of you know international exposure but these are mostly US data center
REITs but they’re all growing very very good rates and I didn’t do charts on
these for companies but I’ve wanted to group them you know together and so you
could have them and maybe put them on your watch list they are digital Realty
ticker symbol DLR qts Realty Trust Inc ticker symbol qtr core site Realty
ticker symbol cor cyrus 1 inc tipper ticker symbol co n e and as you can see
my note that these are mostly US data centers and these will capitalize on the
growth and expansion of the cloud and enterprise software and tools moving off
premise so the the old days of having an IT and support and server people on at
each and every headquarters and location is becoming a thing of the past
and they’re moving to the cloud and the clouds expanding and so cloud providers
are offloading they can’t keep up that I offload the expansion to these
data center companies like these four and the other Equinix or I think what is
it Equinix yes so yes and that those are
the 13 blue chip wreaths it was I’m out of breath here that was uh that was fun
to do so yeah there there’s a lot there I know that a lot to take in a lot of
companies but I hope you took something away and appreciate it and enjoy it it
was a lot of work took you know it’s a couple hours to compile all this data so
you know but I think you know these are these are companies and there’s more but
these are companies that if you’re considering you know if you’re
considering wanting to get into the REIT space and you aren’t sure always go with
blue chips don’t don’t do screening on dividend yield alone because it will get
you in a whole mess of trouble and you’ll lose money these are good
companies so you can see some of the some of the charts these guys have
doubled tripled quadrupled five times you’re just the share price right on top
of all of the dividend growth combined this is how compounding dividend growth
building a just an amazing portfolio and whatever sector and whatever segment
that you’re looking for I’m gonna get into probably do I’m definitely gonna
probably try to do one in energy and utilities we’ve got a woman just as me a
whole series on blue chips so stay tuned and we I’m growing subscriptions
appreciate all you new people just do me a favor and like the video subscribe if
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notified as new videos come out so until next time guys thanks for tuning in and
thanks for watching and don’t forget about the swag check me
out on social media til next time deuces

12 thoughts on “Buying the Blue Chips: Blue Chip REIT’s (Quality over Yield All Day Everyday)

  • 4:36 Correction: Distributions paid out by REITs are taxed as ordinary income rather than as qualified dividends, regardless of how long you own shares of a given REIT.

  • Thanks for aggregating this great information for us. I own the following Non-Trash Blue Chip REITs in my M1 Finance Dividend Growth Portfolio in the Real Estate Sector sub-pie: AMT, DLR, ESS, FRT, ARE, O, VTR, PLD, and WY. https://m1.finance/iyDzLjKVM

  • CORREECTION: REIT dividends are paid as ORDINARY INCOME TAX not Qualified Dividends my bad @ 4:34

  • JMac. Just found your channel. New sub Good content on REITS. Really appreciate the down-to-earth perspective and demeanor.

  • Big fan of REIT's. I've got Realty Income (O) on my shopping list. Great content. Just subbed & rang the notification bell!! Just started my own investing channel a couple months ago. Would love your input!

  • What are your thoughts on WSR? They’ve had some vacancies that are impacting them and that’s making the prices look very attractive.

  • Thanks for this have been looking at a few of these for awhile now, we have direct access to buy American, Canadian stocks and funds from New Zealand now.

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