The iShares Mortgage Real Estate ETF (REM) offers a tempting 9% yield but has lost principal over the past decade due to its leveraged mortgage spread holdings. Unlike REM, three equity REITs—Realty Income, VICI Properties, and W. P. Carey—own actual properties with long-term leases and rent escalators, providing more stable and growing dividend income. These alternatives yield around 5-7% but have shown positive net asset value growth and rising funds from operations. Investors seeking durable real estate income may consider swapping part of REM into these equity REITs for better capital preservation and income growth.
AGNC Investment Corp. is rated Hold at a price of $10.95 because it trades at a significant premium to its tangible book value of $8.58 per share. The company benefits from favorable mortgage market conditions that support its income and dividend pay...
Investors holding high-yield dividend stocks like mortgage REITs and BDCs outside a Roth IRA face significant tax penalties, as these dividends are taxed as ordinary income. A $500,000 portfolio in these stocks can lose about $12,720 annually in taxe...
