The Stock Market Blog: January 2019

Utilities have historically been known as ‘safer’ shares throughout history, meaning that they have been considered very conservative investments. Recently, which has shown to be not so true in recent history regarding certain companies (e.g. PUBLIC Utilities Three Mile Island), although overall, during extended periods of time, utilities have paid favorable dividends with low volatility. Here are some examples of utility stocks with decent CD beating produces. Consolidated Edison, Inc. (ED) has a yield of 5.4%, with an ahead PE of 12.5. The ongoing company provides electricity, gas, and vapor to customers in NY Westchester and City County. American Electric Power Company, Inc. (AEP) yields 4.6%, and has a ahead PE of 11.6. AEP creates electricity from coal, lignite, gas, nuclear, and hydroelectric energy.

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It is known as a “blue chip” REIT partially because it is “arguably the best-diversified landlord in health care” (according to Josh Peters of Morningstar). Regarding OHI, I love its high current yield, high dividend growth rate relatively, low payout ratio, and reasonable to undervaluation; however, I dislike its lower credit rating, past dividend suspension, and insufficient property diversification. It really is considered a “pure play” REIT because of its focus on skilled nursing facilities, offering more risk but more prize than others possibly. Brad Thomas, a REIT industry expert who writes for Seeking Alpha, has favorable opinions on both names and wrote a recently available article on OHI.

Thus, easily were to purchase a healthcare REIT, I’d likely choose either HCP or OHI then. I have been looking at non-healthcare REITs also. Two of the popular names among dividend growth investors are Realty Income (O) and Digital Realty Trust (DLR). I consider A to be a well-run blue chip REIT with a solid dividend development record, but I desire a much better valuation.

I consider DLR to be undervalued despite strong recent development, but they have a higher risk/reward ratio than other REITs because of its technology emphasis. I shall continue to evaluate these and other titles as I explore the REIT space. Note that if I decide to invest in a REIT, then it’ll be in my Roth IRA because REIT dividends would be taxed as ordinary income in my taxable account.

Posted by Dividend Growth Machine at 8:08 PM 15 responses: Email ThisBlogThis! Dividend Growth Machine I am a 32-year-old dividend development buyer and a professor at a well-known university or college. I am no investment professional or a certified financial advisor. I am a self-educated investor and the contents of the blog reflect my personal trading strategy, thoughts, and decisions, which might not be befitting other investors. My investing decisions do not constitute recommendations or advice. You should seek advice from with an investment professional prior to making any investing decisions.