Monday, June 09, 2008

If you are looking for a high income and you think that real estate has bottomed out, you should take a look at real estate investment trusts, which avoid taxation at the corporate level because they pass through at least 90% of their taxable income to their shareholders. Sometimes a portion of the income may be non-taxable.

All of the following stocks have yields of 10% or more, P/E ratios below 17, and PEG ratios below 2.2. Dividends are subject to change or termination, however, most of these stocks have been paying dividends for at least a few years.

· Arbor Realty Trust, Inc. (ABR) is a debt-oriented REIT that invests in real estate bridge and mezzanine loans, mortgage-backed securities, and discounted mortgage notes. It has paid quarterly dividends since 2004. This company pays a yield of 17.6%. The stock has a P/E of 3 and a PEG of 0.39.

· Gramercy Capital Corp. (GKK) is a debt REIT that holds first mortgage loans, mezzanine financing, preferred equity bridge loans, and permanent loans. They have paid quarterly dividends since 2004. This company pays a yield of 15.4%. The stock has a P/E of 3 and a PEG of 0.37.

· Northstar Realty Finance Corp. (NRF) is a commercial-oriented REIT that invests in mortgages secured by income-producing real estate properties, commercial mortgage backed securities, REIT unsecured debt, and credit tenant loans, and net lease properties. It has paid quarterly dividends since 2005. This company pays a yield of 14.5%. The stock has a P/E of 3 and a PEG of 0.48.

· Anthracite Capital Inc. (AHR) is a commercial-oriented REIT that invests in commercial mortgage-backed securities also known as CMBS, secured debt backed, mezzanine loan financing and equity. It has paid quarterly dividends since 1998. This company pays a yield of 12.7%. The stock has a P/E of 6 and a PEG of 1.27.

· Capital Trust, Inc. (CT) is a REIT that invests in structured commercial real estate mortgage investments, B Notes, subordinated CMBS, corporate mezzanine loans, first mortgage loans, and real estate mezzanine loans. It has paid quarterly dividends since 1987. This company pays a yield of 11.2%. The stock has a P/E of 6 and a PEG of 0.91.

· Annaly Capital Management, Inc. (NLY) is a REIT that invests in mortgage pass-through certificates, collateralized mortgage obligations, agency callable debentures, and FHA and FNMA loans. It has paid quarterly dividends since 1997. This company pays a yield of 10.7%. The stock has a P/E of 12 and a PEG of 1.88.

· GMH Communities Trust (GCT) is a REIT that housing specializes in housing for college and university students, along with military housing. It has paid quarterly dividends since 2004. This company pays a yield of 10.0%. The stock has a P/E of 16 and a PEG of 2.19.

If you like high income stocks, you should also look at high yielding utility stocks and you might also want to look at monthly dividend stocks.

Source: www.seekingalpha.com