3 REITs with Dividend Yields Over 22% (Is This a Scam)

In today's market, you might be wondering about the availability of Real Estate Investment Trusts (REITs) with dividend yields greater than 22%. And the natural follow-up question is whether a long-term investor should base their decision solely on the highest dividend yield. Check out the video titled:"3 REITs with Dividend Yields Over 22% (Is This a Scam)".

💰 Get more content in depth: undervalued stocks tips, stock analysis, calculators, community chat etc. https://www.patreon.com/InvestwithJiri

🎆 I use Interactive Brokers to invest: https://ibkr.com/referral/jiri816

💌 For occasional news from the world of investing: https://investwithjiri.com/investor-news

🎵 I use Epidemic Sound, sign up for a 30-day free trial https://share.epidemicsound.com/1t7h74

👦 Hi, if you are here for the first time, I`m Jiri. I am an entrepreneur, investor and Youtuber. I am dedicated to long-term investing in the stock market and make videos about it.

📧E-mail for bussiness purpouse: InvestwithJiri at gmail.com

DISCLOSURE: Some of the links on this page are affiliate links. I may earn a commission if you click through and make a purchase. Affiliate commissions help fund videos like this one.

More about video:
The ideas presented in this video are for entertainment purposes only. You are responsible for the financial decisions that you make.

Before venturing into the world of REITs, there are several fundamental questions that must be addressed. First and foremost, what exactly is a REIT? Essentially, a REIT is a company that owns or finances income-producing real estate in a variety of property sectors. These companies are renowned for their ability to generate attractive dividend yields, which makes them a lucrative investment option for many.

Moving on, it's imperative to consider the benefits of investing in REITs. They offer diversification, a stable source of cash flow, and the potential for substantial dividend payouts. However, like any investment, REITs come with their own set of risks and challenges that need to be carefully evaluated.

Now, let's delve into the way REITs are traded. Unlike traditional stocks, REITs are traded on major stock exchanges, and they can be bought and sold just like any other publicly traded company. This characteristic provides investors with a level of flexibility and liquidity that might not be available in other real estate investment vehicles.

It's also crucial to keep an eye on the current state of the real estate market because it directly impacts the performance of REITs. Factors such as interest rates, demand for various property types, and overall economic conditions play a significant role in determining how well REITs perform in a given market environment.

With this foundational knowledge in place, let's now focus on the three REITs with the highest dividend yields that I've selected for today's discussion. Surprisingly, these REITs offer astonishing dividend yields ranging from 22% to 24%. Yes, you heard it right, even in today's market, it's possible to find such high yields. The three REITs that have caught our attention are:

ARMOUR Residential REIT (ARR) - 24.40% dividend yield
Orchid Island Capital (ORC) - 24.10% dividend yield
Office Properties Income Trust (OPI) - 22.40% dividend yield
The allure of high dividend yields is undeniable, and these percentages may seem tempting to investors. However, the million-dollar question remains: which of these companies, if any, should a long-term investor consider holding in their portfolio?

In my view, the answer is simple: none. While the high dividend yields are eye-catching, when we carefully consider the associated risks, it becomes clear that these REITs are not suitable for long-term investments. The high yields may be a result of unusual circumstances or market conditions, and such situations are often unsustainable over the long haul.

In fact, it appears that these REITs might be using their high dividend yields as bait to attract more investments. However, such a strategy seems shortsighted and unsustainable. As an investor, I would advise steering clear of these companies and looking for more stable, long-term opportunities in the REIT market.

So, I won't be offering any shortcuts or quick fixes for choosing between a quality REIT stock and a high dividend yield. This video's primary message is to emphasize that chasing unsustainable dividend yields in REITs is not a wise investment strategy. If someone suggests buying into these high-yield REITs, always do your due diligence and verify the information to ensure it's a sound investment decision.

The key takeaway here is to avoid the temptation of blindly investing in the allure of high dividends and instead, be wise and prudent in your investment decisions. There are no shortcuts to making smart investment choices, and a careful, well-informed approach will serve you better in the long run.