By Brad Thomas via Iris.xyz
Knowing “sure things” don’t exist, especially in investing, here are 10 notions that help me get close to a sure thing, and help me to sleep well at night.
I’m Brad Thomas and I write about REITs. I’ve also been a real estate developer and investor — in a career nearly three decades long.
1. The price an investor pays for future earnings and dividends is currently the lowest in seven years.
2. I count on a collection of Real Estate Investment Trusts (REITs) that I call SWANs, to grow their dividend annually — it’s not an option; it’s a requirement. SWAN stands for Sleep Well at Night.
3. While REITs are structured as investment securities, they own real estate.
4. Operating fundamentals have improved steadily the past seven or eight years. Overall, Funds From Operations (FFO) have enjoyed an annual growth rate of 16.6%. This is due to (a) rising rental income year after year from properties owned by REITs, (b) acquisitions of new properties as REIT access to capital markets and their skills at managing properties efficiently have created profitable opportunities to expand holdings, and (c) IPOs by new REITs and conversions of existing companies to REIT status.
5. In this article, REITs I refer to are those that are publicly-traded (not non-publicly-traded, or private REITs). There are over 225 publicly-traded in the REIT Universe. I cover over half with updated recommendations. Only fewer than two dozen are SWANs that I recommend at this time – and I’ll share 10, at the end of this article.
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