3 REITs Paying up to 10% with Double-Digit Upside Ahead

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The yield on the benchmark, 10-year U.S. Treasury note has moved above 3% in May, which is the highest it’s been since 2011.

This is notable to REIT investors for multiple reasons. First, higher interest rates (both short-term and long-term) mean that bank CD’s and other lower-risk income investments are offering higher competitive yields.

Of equal note, is the fact that rising long-term interest rates are now factoring into higher discount rates for fundamental valuation models. In other words, investors will now require higher dividends to justify current valuations and be compensated for the rise in rates.

I believe that investors consistently reward growth in stocks, even with more income-oriented groups like REITs.…
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Most of your friends are going to struggle to make any money in U.S. stocks for the next five to seven years. They’re battling not one, not two, but three major headwinds:

  1. Low yields,
  2. High valuations, and
  3. Rising interest rates.

Historically, half of the stock market’s returns (or more, depending on the study you believe) have come from dividends. With the S&P 500 paying just 1.8%, the math isn’t promising.

An expensive market is also problematic because it makes rising multiples unlikely. The S&P index trades for 25-times earnings today – where can it really go from here but down?

Finally, rising interest rates are a concern for many income investors.…
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What exactly does the Catholic Church think about dividends?

A lot, as it turns out. The United States Conference of Catholic Bishops outlines a number of principles and policies in a roughly 6,000-word document you can find here. Highlights include:

  • Protecting human life
  • Protecting human dignity
  • Reducing arms production
  • Pursuing economic justice
  • Protecting the environment
  • Encouraging corporate responsibility

Also the USCCB has dual-mandate that requires “a reasonable return on its investments and is required to operate in a fiscally sound, responsible and accountable manner.” In other words, just like you and I, the Catholic Church expects returns.

The Global X S&P 500 Catholic Values ETF (CATH) invests in hundreds of S&P 500 components that qualify according to the USCCB’s stated values.…
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About Author

Brett

Hi, I’m Brett Owens – and I’m a financial junkie. My “problem” started incollege, when I got a little dose of the stock market – man, was I hooked…in no time, I was reading the Wall Street Journal religously.

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