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REIT Stocks With 6.27% Dividends Pass Financial Screen

Yahoo Finance •
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A financial screen of real-estate investment trusts identified seven companies with strong dividend sustainability, including Gaming & Leisure Properties, which owns the Bally's Casino in Blackhawk, Colorado. REITs must distribute most profits as dividends to maintain tax advantages, making dividend cuts a major investor concern. The screen focused on equity REITs with sufficient adjusted funds from operations to cover payouts.

The analysis used a 174-REIT universe from the Russell 3000 Index, narrowing to 108 companies with analyst coverage and 2026 AFFO estimates. Among these, 86 showed at least 1% AFFO headroom above current dividend yields. This buffer suggests these REITs can maintain or potentially increase dividends even if market conditions tighten. The screen excluded mortgage REITs, which don't have property maintenance costs.

Financial advisors caution that unusually high dividend yields often signal underlying problems, as investors anticipate cuts by selling shares. The selected REITs passed this test by maintaining yields below levels that would trigger market skepticism. This screening approach helps investors identify REITs positioned to weather economic uncertainty while continuing to provide income through dividends.