3 REITs With Yields Over 5% to Buy Today

Interested in REITs? If so, H&;R Real Estate Investment Trust (TSX:HR.UN), Morguard Real Estate Inv. (TSX:MRT.UN), and Killam Apartment REIT (TSX:KMP.UN) have high and safe yields over 5%.

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If you’re a fan of real estate investment trusts, but cannot figure out which one to buy today, then this article is for you. I scoured the industry and selected three great options with high and safe yields over 5%, so let’s take a quick look at each to determine which would be the best fit for your portfolio.

1. H&R Real Estate Investment Trust

H&R Real Estate Investment Trust (TSX:HR.UN) is one of the largest diversified REITs in Canada with 517 office, retail, industrial, and residential properties that total approximately 47.2 million square feet. It pays a monthly distribution of $0.1125 per share, or $1.35 per share annually, which gives its stock a yield of about 6.9% at today’s levels.

Investors should also note that H&R has maintained its current annual rate since 2013. However, I think its increased amount of funds from operations, including 3.7% year-over-year growth to $1.95 per share in fiscal 2015, and its reduced payout ratio, including 69.2% in fiscal 2015 compared with 71.8% in fiscal 2014, could allow it to announce a slight increase at some point in 2016.

2. Morguard Real Estate Investment Trust

Morguard Real Estate Inv. (TSX:MRT.UN) owns a diversified portfolio of 50 retail, office, and industrial properties that total approximately 8.8 million square feet of leasable space. It pays a monthly distribution of $0.08 per share, or $0.96 per share annually, which gives its stock a yield of about 6.85% at today’s levels.

Investors should also note that Morguard has maintained its current annual rate since 2013, and I think its consistent funds from operations, including an adjusted $1.28 per share in both fiscal 2015 and fiscal 2014, could allow it to continue doing so going forward.

3. Killam Apartment REIT

Killam Apartment REIT (TSX:KMP.UN) is one of Canada’s largest residential landlords with 176 apartment properties and 35 manufactured home communities across the country. It pays a monthly distribution of $0.05 per share, or $0.60 per share annually, which gives its stock a yield of about 5.4% at today’s levels.

Investors should also note that Killam has maintained its current annual rate since 2014. However, I think its increased amount of funds from operations, including 11.5% year-over-year growth to an adjusted $0.68 per share in fiscal 2015, and its low payout ratio, including an adjusted 87.7% in fiscal 2015 compared with an adjusted 98.1% in fiscal 2014, could allow for a significant increase within the next few months.

Should you buy one of these REITs today?

H&R, Morguard, and Killam Apartment are three of the most attractive investment options in the REIT industry today. Foolish investors should take a closer look and strongly consider beginning to scale in to positions in one of them over the next couple of trading sessions.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joseph Solitro has no position in any stocks mentioned.

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