I believe real estate investment trusts (REITs) are a great way to boost passive income through dividend payments. This is because these trusts are designed to return 90% of profits to shareholders. I already own a number of these types of stocks as part of my holdings. Another REIT I’m considering adding to my holding is Assura REIT (LSE:AGR). Here’s why.

Healthcare properties

As a quick introduction, Assura is a property business that focuses on GP surgeries, primary care, and community healthcare buildings. It designs, builds, invests in, and manages these properties as well as earning rental income from them.

So what’s happening with Assura REIT shares currently? Well, as I write, they’re trading for 67p. At this time last year, the stock was trading for 74p, which is a 9% decline over a 12-month period.

A REIT with risks I must consider

Let’s consider some bearish aspects first then. As with any stock I look to buy for boosting my passive income stream, I must remember dividends are never guaranteed. These can be cancelled at the discretion of the business. Some reasons that this can occur are economic volatility, a financial crash, or a one-off, unexpected event like a pandemic. Dividends are cancelled to conserve cash.

Another issue I feel could affect Assura’s level of returns is the fact most of its buildings are used by the NHS. There is a chance that an NHS price cap for renting such facilities could be enforced. This would limit the income Assura could earn and limit returns I hope to make. This is a development I will keep an eye on.

Why I like Assura shares

So to the positives then. Firstly, I believe that Assura REIT has excellent defensive traits. This is because it provides its properties to the healthcare sector, specifically the NHS. Healthcare is a staple for all. No matter the economic outlook, healthcare services will always be needed. This demand level should continue to boost Assura’s performance and levels of returns.

Next, I can see Assura has a great track record of performance. I do understand that past performance is not a guarantee of the future, however. Looking back, I can see Assura has grown revenue and gross profit for the past four years in a row. As the UK population continues to increase, I envisage performance and returns growing as healthcare services will only increase too.

For any REIT I consider buying, I look at levels of returns. Assura’s current dividend yield stands at 4.5%. This is double the FTSE 250 average of just under 2%.

Finally, at current levels, Assura shares look decent value for money on a price-to-earnings ratio of just over 11.

To summarise, I would add Assura REIT shares to my holdings to boost my passive income. Its current yield, performance track record, as well as defensive traits help me come to my decision.

The post Here’s 1 REIT I’m looking to buy in September for juicy dividends with defensive traits! appeared first on The Twelfth Magpie.

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Jabran Khan has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Boosting my passive income stream through dividend payments is a core part of my investment strategy. I own a number of real estate investment trusts (REITs) already. Another REIT I believe could help boost my holdings is NewRiver (LSE:NRR). Here’s why.

Retail property investment

A REIT is a business set up to make money from property that will yield rental income. As a rule, REITs must return 90% of profits to shareholders as dividend payments.

NewRiver is a REIT that specialises in buying, developing, and managing retail and leisure spaces throughout the UK. These usually consist of shopping centres and retail parks that provide essential goods to local communities.

So what’s happening with NewRiver shares currently? Well, as I write, they’re trading for 86p. At this time last year, the stock was trading for 74p, which is a 16% increase over a 12-month period.

A REIT with risks

As with any dividend stock, dividends are never guaranteed. They can be cancelled at the discretion of the business at any time. This can be for a few reasons. A few that spring to mind are poor performance or an external event such as a pandemic or financial crash. Usually, when events like these occur, many businesses cancel dividends to conserve cash.

Specifically in regards to NewRiver, the changing face of retail does pose a threat to its business and investment case. The rise of online shopping, along with the technology-driven world we live in, has meant more traditional retail businesses have suffered. A lack of footfall and customers turning to online alternatives has meant many retailers have fallen by the wayside. With this in mind, NewRiver may find it struggles to fill its sites in the longer term.

The bull case and what I’m doing now

So to the positives then. I note that NewRiver has had a new lease of life under new CEO Allan Lockhart. He has managed to navigate the business away from potential disaster by streamlining operations, paying down surging debt levels, and restoring its dividend. He decided to streamline by selling some of its unprofitable locations. My research indicated that NewRiver’s occupancy rate is over 95% and rental rates continue to rise.

A Q1 trading update released by NewRiver at the end of July covering the period ending 30 June made for excellent reading. It confirmed that occupancy and rental collection had both increased to over 96%. Furthermore, it boosted cash flow and now has £93m at its disposal. Crucially, it also managed to secure a fixed interest rate on debt until March 2028. This means that despite interest rates rising, servicing the debt won’t become tougher for it due to its fixed rate.

NewRiver’s ongoing turnaround currently makes it seem an attractive stock to buy to boost my passive income stream. The shares’ current dividend yield stands at over 8%! This easily surpasses the FTSE 100 average of 3%-4%.

Overall, I think NewRiver could be an excellent REIT to add to my holdings. I would add some shares to my holdings and expect dividends to continue boosting my passive income for the foreseeable future.

The post This REIT could be the perfect stock to supercharge my passive income stream! appeared first on The Twelfth Magpie.

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Jabran Khan has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

A real estate investment trust (REIT) is a great way to boost my passive income through dividend payments. I own a number of these types of stocks already as part of my holdings. Another I like the look of is Target Healthcare REIT (LSE:THRL). Here’s why.

Healthcare provisions

As a quick introduction, Target is a REIT that purchases and lets out care homes and other healthcare-related properties. It isn’t the most exciting sector, but it could be lucrative, in my opinion.

As a quick reminder, a REIT is a business designed to make money from income-yielding property. As a rule, 90% of profits must be distributed to shareholders in the form of dividends.

So what’s happening with Target shares currently? Well, as I write, they’re trading for 114p. At this time last year, the stock was trading for 124p, which is an 8% decline over a 12-month period. This does not concern me, as many shares have pulled back due to macroeconomic and geopolitical factors in recent months. In fact, the shares falling could make them a bargain currently.

Risks to note

As with any dividend stock I am looking to add to my holdings, I must remember that dividends are never guaranteed. These can be cancelled at the discretion of the business at any time. This can be for a multitude of reasons such as poor performance or even an extreme event like a recession or pandemic like in 2020.

Target, like many other REITs, could come under pressure from the current cost-of-living crisis which may affect rent collection. If it cannot collect its rent, it cannot perform and return money to shareholders in the form of dividends. This is a real risk towards boosting my passive income through the shares. I will keep an eye on developments here.

A REIT I would buy

I believe Target has defensive capabilities. This is because healthcare and provisions linked to healthcare are essential for all people. This could see its ability to perform increase in the years ahead. Furthermore, the ageing population in the UK could also boost Target’s performance and returns with its interests in care homes.

So to the fundamentals then. I like the look of Target’s performance track record. Now I do understand that past performance is not a guarantee of the future, but performance underpins returns. Looking back, it has grown revenue and profit for the past four fiscal years.

Next, Target has an attractive dividend yield of just under 6% at current levels. This is almost three times the current FTSE 250 average of just under 2%.

Finally, Target shares look good value for money at current levels on a price-to-earnings ratio of just 12. There is a general consensus that a ratio of lower than 15 represents value for money when buying shares.

I like Target Healthcare REIT and it is one stock I would buy for my holdings to add to my collection of other REITS. I believe it will continue to grow in line with the demographic changes here in the UK, and provide consistent and stable returns.

The post This defensive REIT is a great stock to buy for growth and dividends! appeared first on The Twelfth Magpie.

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Jabran Khan has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

I own a number of real estate investment trust (REIT) stocks as part of my holdings. This is to boost my passive income stream as well as access the property market through stocks without having to buy and manage property myself. One in particular I like the look of is Civitas Social Housing (LSE:CSH). Here’s why.

Social housing REIT

Civitas specialises in providing social housing for people across the UK. As a quick reminder around REITs, they are businesses set up specifically to provide consistent returns to shareholders through income-yielding property.

There are many different types out there which focus on different types of property such as social housing, office space, healthcare properties, and industrial properties to mention a few. One thing they all have in common is all REITs must return 90% of profits to shareholders. This is one of the biggest attractions for me as a passive income seeker.

So what’s happening with Civitas shares currently? Well, as I write, they’re trading for 82p. At this time last year, the stock was trading for 117p, which is a 29% decline over a 12-month period. Many stocks have pulled back in recent months due to macroeconomic and geopolitical factors.

Risks to note

It must be noted that dividends are never guaranteed. They can be cancelled at the discretion of the business at any time. An example of when this could occur for a REIT is poor performance, or alternatively a one-off extreme event such as a financial crash or pandemic.

One of the biggest risks REITs face is that of rent collection. If for any reason it cannot collect rent, it cannot provide returns to shareholders. The current cost-of-living crisis, which has been caused by macroeconomic headwinds in recent months, could play a part here.

The bull case

So to the positives then. As a passive income seeker, I instantly look for the dividend yield on offer. Civitas shares offer a yield of over 6% currently. This is higher than the FTSE 100 average of 3%-4%.

Next, performance underpins dividends, so what is Civitas’ track record recently? I am aware that past performance is not a guarantee of the future, but looking back, I can see revenue has increased year on year for the past four years.

Looking at the Civitas share price, the shares look decent value for money at current levels on a price-to-earnings ratio of just over 11. The general consensus is that a ratio of below 15 indicates value for money.

Finally, the current demand for housing in the UK outstripping supply is a major positive for me. A REIT like Civitas is in a prime position to grow its portfolio of properties and capitalise on increasing demand for years to come. Social housing is seen as one of the most stable parts of the property market.

Overall, I like the look of Civitas shares and would add them to my holdings to boost my passive income stream. I also expect demand for social housing to help boost its growth. This REIT will fit in nicely with the others in my portfolio.

The post Here’s 1 REIT to buy for dividends and growth! appeared first on The Twelfth Magpie.

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Jabran Khan has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

What is a REIT?

A REIT is an investment trust specialising in property investment. By purchasing a share in one, I can access the property market without worrying about the costs of purchasing a property or the day to day worries of managing a single property or portfolio of properties.

Why are REITs good stocks to build a passive income stream? They must legally return 90% of profits to shareholders as dividends.

I must note there are risks involved in buying such shares. Economic conditions do affect rental income, which can hurt shareholder returns. A prime example of a crisis is the 2020 pandemic and market crash. REITs struggled to collect rent and were unable to turn a profit. This meant many were unable to payout dividends in 2020.

Midlands-focused REIT

Real Estate Investors was formed in 2004 and currently possesses a property portfolio worth £195m. It focuses on commercial and residential properties and has a geographical focus on the Birmingham and Midlands area.

RLE is currently a penny stock as the shares are trading for 39p. At this time last year, the shares were trading for 37p, which is a 5% increase over a 12-month period. It’s worth noting that the shares are still below pre-pandemic levels as they were trading for 56p in February 2020 before the stock market crash.

I can see prior to the pandemic that revenue and profit grew for two years between 2018 and 2019 but in 2020 it recorded a loss due to the effects of lockdowns. I understand that past performance is not a guarantee of the future, of course.

RLE started to recover in 2021. Full-year 2021 results released in March showed revenue only £0.4m less than 2020 levels. More tellingly, it reported a profit of £13.9m for 2021 compared to a £20.2m loss in 2020. It also reported it had £9.8m cash in the bank, which boosted the balance sheet. The overall dividend for 2021 was 3.0625p, which is up 2% from 2020 levels.

Risks and verdict

Now for the bad news. RLE does face credible headwinds currently. Soaring inflation and the cost of living crisis in the UK could impact rent collection. In turn, this could impact performance and any shareholder returns as well. I will keep a keen eye on performance in these uncertain times.

At current levels, RLE shares sport a juicy dividend yield of over 7.5%. The FTSE 100 average dividend yield is 3%-4%! The shares look good value for money too on a price-to-earnings (P/E) ratio of just 5 as well.

I’d buy Real Estate Investor shares, adding this REIT to my existing collection. I believe they will help boost my passive income stream and provide stable returns over the long term.

The post 1 REIT with a 7%+ dividend yield to make me some passive income! appeared first on The Twelfth Magpie.

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Jabran Khan has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Convenience

NewRiver REIT (LSE: NRR) is a property investor, which owns and manages a mix of shopping centres, retail parks, high street properties and leisure assets. It has a convenience and community-led approach, with a focus on high-yielding-but-low-risk retail properties.

NewRiver’s growth track record is certainly attractive — dividends per share have grown at a compound annual growth rate of 9% over the past four years, while funds from operations (FFO) per share have increased by 11% annually over the same period.

The company released its Q1 trading update this morning which continued to highlight the progress made with its development pipeline. Planning consents for a 236,000 sq ft mixed-use development in Cowley and 38,000 sq ft hotel in Romford had been obtained, while it made further progress made on rolling out its convenience store programme.

Despite near-term economic headwinds, I reckon the REIT will continue to perform well for its shareholders. After all, CEO David Lockhart likes to remind us that the business was founded in 2009 during a severe recession, and in spite of this, it has grown into a FTSE 250 entity in less than eight years. Also, rents and occupancy levels have so far held up well, with average rent increasing to £12.63 per sq ft (up from £12.45 in March) and the retail occupancy rate holding steady at 97%.

With the shares having delivered capital gains of 12% over the past 52 weeks, NewRiver currently trades at a 13% premium to its net asset value (NAV). To most investors that may seem rather pricey, as the UK property sector as a whole trades at a slight discount, but I can see why the shares may justify a premium.

NewRiver has tempting income and growth appeal, with shares yielding 5.9% and growth underpinned by management’s strong experience and track record.

Opportunistic

But for those investors looking for a less expensive play in the sector, Regional REIT (LSE: RGL) may be the right property stock for you.

It is an opportunistic investor in industrial and office assets located in regional centres outside of London. The company may seem like a somewhat more risky play on the property sector, as it focuses on high-yielding, undervalued properties with under-appreciated recovery prospects.

But with this strategy also comes potentially greater returns — Regional REIT aims to deliver an attractive total return of around 10%-15% annually. So far it is doing well. Since the start of the year, it has secured a number of re-gears, achieving an average uplift of 2.8% on headline rents.

And with its shares trading at a discount of 2% to its NAV and yielding 7.3%, Regional REIT seems to offer a potent mix of a high yield and an enticing valuation.

The post 2 massive yielders you probably haven’t considered appeared first on The Twelfth Magpie.

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Jack Tang has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Real estate investment trusts, such as British Land (LSE: BLND), Intu (LSE: INTU) Hammerson (LSE: HMSO) and Land Securities (LSE: LAND) have put in an impressive performance during the past five years.

A combination of investors’ search for yield, rising UK property prices and easy credit have all worked in favour of REITs. Over the past five years, British Land, Land Securities, and Hammerson have outperformed the wider FTSE 100 by 66%, 57% and 91% respectively, excluding dividends.

Intu is the laggard of the group. The company has underperformed the FTSE 100 by 19% since August 2010. 

Nevertheless, one group of City analysts now believes that it’s time for investors to book gains in the REIT sector. Specifically, analysts believe that commercial and residential property prices are in bubble territory again, after years of growth fuelled by “loose money, low inflation and lots of cheap credit”.

What’s more, there are signs that property investors are starting to cash out of the market, booking gains made since the end of the financial crisis. Rising interest rates are only likely to lead to an acceleration of this trend.

Moreover, REITs are no longer an attractive way to play the property market.  For example, Land Securities, British Land and Hammerson all trade at net asset values and offer a dividend yield that’s currently below the market average.

Crunching numbers 

British Land is one of the UK’s largest REITs, and it’s also one of the cheapest. At the end of 2014, the company’s net asset value came in at 829p per share, so at present levels the company is trading at a slight discount to NAV.

Still, if the commercial property market is about to take a tumble, British Land’s NAV will fall in line with the wider market. The company’s dividend yield stands at 3.5%, slightly below the FTSE 100 average of 3.6%. 

Land Securities’ dividend yield stands at a lowly 2.6%, and the company’s adjusted NAV was reported as being 1,293p at the end of 2014. Investors have been prepared to pay a premium for Land Securities’ shares due to the company’s exposure to the London property market. But with quantitative easing coming to an end, Land Securities is facing the prospect of rising costs of capital and moderating asset returns. 

Hammerson reported a NAV of 638p at the end of 2014, so once again the company is trading at a slight discount to NAV. Nonetheless, Hammerson’s dividend yield of 3.3% leaves a lot to be desired, and there are better opportunities out there.  

Intu has underperformed the FTSE 100 over the past five years for good reason. The company has a high level of debt and has failed to create any value for shareholders during the past six years. Since 2009, Intu’s book value per share has not exceeded 360p, while shareholder equity has increased 140%.

It seems as if the company is diluting existing shareholders to achieve growth. Also, Intu’s gross gearing around 99% and the company’s interest payments are only covered one-and-a-half times by operating income. 

The post As Analysts Warn Of A ‘Bubble’, Is It Time To Sell British Land Company PLC, Intu Properties PLC, Hammerson plc & Land Securities Group plc? appeared first on The Twelfth Magpie.

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Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.