Finding high yielding companies that offer value in the real-estate investment trust (REIT) space is tricky business, given the higher relative yields one is able to find across most trusts.
That being said, in this article I'm going to discuss one excellent dividend grower that has been cut almost in half in since 2016: Kimco Realty Corp. (NYSE:KIM).
Kimco finds itself in one of the most unloved sectors of 2018: shopping center/retail REITs. There has been an understandable shift from many investors in the way in which shopping centers are viewed compared to other real estate vehicles, and as such, share prices of many REITs have plummeted (Kimco is trading at 2003 levels, currently).
Kimco's strategy in recent years has been to re-balance the trust's portfolio of properties, selling $6 billion worth of assets since 2010 in an attempt to maintain and grow its highest-quality assets and redefine its portfolio for long-term investors.
Kimco also has a number of high quality mixed use redevelopment opportunities with its existing real-estate portfolio, providing for significant long term potential for investors willing to accept longer wait times (cash flow growth from such development would take time to flow through to shareholders, hence the share price dip).
From a potential standpoint, Kimco remains an excellent income play, offering a yield of nearly 7% and a growing distribution over time. The REIT has consistently raised its dividend distribution over time (albeit in a slow and steady fashion), and could turn out to be an excellent long-term hold for those with the stomach for short term volatility.
Invest wisely, my friends.
