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These stocks have the highest dividend -2-

FFO stands for funds from operations, which is a non-GAAP measure used by REITs to gauge dividend-paying ability. FFO adds depreciation and amortization back to earnings, while subtracting any gains on the sale of investments. We can calculate the FFO yield by dividing the past 12 months' FFO by the current share price. If the FFO yield exceeds the dividend yield, it appears there is "headroom" to raise the dividend, or at least maintain the current payout. If the FFO yield is lower than the dividend yield, you had better find out why -- is this a temporary decline for a specific reason?

For a few of the companies, FFO figures weren't available, so we used trailing free cash flow yields instead. A company's free cash flow is its remaining cash flow after planned capital expenditures. Free cash flow yield figures appear in the FFO yield column for CBRE Group and Weyerhaeuser (WY).

Income-seeking investors may be excited by some of the high yields at the top of the list. But beware -- some of the highest-yielding REITs are also some of the worst-performing, at least recently. This is why, before considering an individual REIT investment, you need to do your own research to understand a company's specialty, that particular industry and think about whether the company's long-term strategy seems reasonable.

Analysts' ratings

Here's the list again, in the same order, with a summary of sell-side analysts' opinions:

Company                                          Ticker  Share 'buy' ratings  Share 'hold' ratings  Share 'sell' ratings  Closing price - Oct. 22  Consensus price target  Implied 12-month upside potential 
Macerich Co.                                     US:MAC                  17%                   72%                   11%                   $29.23                  $35.15                                20% 
Iron Mountain Inc.                               US:IRM                  46%                   36%                   18%                   $33.97                  $35.27                                 4% 
Simon Property Group Inc.                        US:SPG                  67%                   33%                    0%                  $154.51                 $178.68                                16% 
Kimco Realty Corp.                               US:KIM                  17%                   66%                   17%                   $21.39                  $19.16                               -10% 
Host Hotels & Resorts Inc.                       US:HST                  41%                   36%                   23%                   $16.78                  $18.73                                12% 
Weyerhaeuser Co.                                 US:WY                  77%                   15%                    8%                   $29.13                  $30.50                                 5% 
Ventas Inc.                                      US:VTR                  17%                   74%                    9%                   $71.99                  $71.37                                -1% 
Vornado Realty Trust                             US:VNO                  36%                   57%                    7%                   $63.65                  $70.25                                10% 
SL Green Realty Corp.                            US:SLG                  44%                   45%                   11%                   $82.31                  $93.06                                13% 
HCP Inc.                                         US:HCP                  52%                   43%                    5%                   $37.52                  $36.01                                -4% 
Welltower Inc.                                   US:WELL                  33%                   62%                    5%                   $91.92                  $89.79                                -2% 
Realty Income Corp.                              US:O                  29%                   62%                    9%                   $79.72                  $78.76                                -1% 
Crown Castle International Corp                  US:CCI                  41%                   47%                   12%                  $141.30                 $142.85                                 1% 
Regency Centers Corp.                            US:REG                  74%                   26%                    0%                   $69.65                  $71.94                                 3% 
Public Storage                                   US:PSA                  14%                   57%                   29%                  $240.54                 $247.00                                 3% 
Digital Realty Trust Inc.                        US:DLR                  46%                   50%                    4%                  $134.81                 $128.86                                -4% 
Extra Space Storage Inc.                         US:EXR                  25%                   50%                   25%                  $115.22                 $117.10                                 2% 
Federal Realty Investment Trust                  US:FRT                  72%                   28%                    0%                  $140.46                 $141.88                                 1% 
Boston Properties Inc.                           US:BXP                  57%                   43%                    0%                  $130.84                 $144.15                                10% 
Apartment Investment and Management Co. Class A  US:AIV                  35%                   53%                   12%                   $54.85                  $54.21                                -1% 
Mid-America Apartment Communities Inc.           US:MAA                  47%                   47%                    6%                  $136.38                 $130.29                                -4% 
UDR Inc.                                         US:UDR                  32%                   64%                    4%                   $49.71                  $49.42                                -1% 
AvalonBay Communities Inc.                       US:AVB                  35%                   65%                    0%                  $221.83                 $222.40                                 0% 
Equity Residential                               US:EQR                  13%                   74%                   13%                   $88.44                  $83.58                                -5% 
Alexandria Real Estate Equities Inc.             US:ARE                  60%                   40%                    0%                  $157.14                 $157.73                                 0% 
Duke Realty Corp.                                US:DRE                  69%                   31%                    0%                   $34.05                  $35.53                                 4% 
Essex Property Trust Inc.                        US:ESS                  44%                   52%                    4%                  $330.99                 $325.86                                -2% 
Prologis Inc.                                    US:PLD                  74%                   26%                    0%                   $90.81                  $91.97                                 1% 
Equinix Inc.                                     US:EQIX                  88%                    8%                    4%                  $569.93                 $580.32                                 2% 
American Tower Corp.                             US:AMT                  33%                   61%                    6%                  $226.74                 $225.71                                 0% 
SBA Communications Corp. Class A                 US:SBAC                  31%                   63%                    6%                  $244.98                 $254.00                                 4% 
CBRE Group Inc. Class A                          US:CBRE                  44%                   56%                    0%                   $51.71                  $59.50                                15% 
                                                                                                                                                                                              Source: FactSet 

REIT ETFs

For investors who want broad exposure to U.S. REITs, there are many exchange traded funds available. It's important to keep in mind that the distribution yields include capital-gains distributed as part of the ETFs' dividends. If you consider an ETF, read carefully about the nature of the dividend distributions and consider tax consequences. Here are six REIT ETFs as examples:

-- The SPDR Real Estate Select Sector ETF (XLRE) holds the 32 stocks in the S&P 500 real-estate sector and has a distribution yield of 2.85%, net of annual expenses of 0.13% of assets. The portfolio totals $4.1 billion.

-- The SPDR Dow Jones REIT ETF (RWR) has $2.7 billion in assets and tracks the Dow Jones U.S. Select REIT Index. The ETF holds 95 stocks. Its distribution yield is 3.19% and the annual expense ratio is 0.25%.

-- The Schwab U.S. REIT ETF (SCHH) has $6.1 billion in assets and also tracks the Dow Jones U.S. Select REIT Index. It has a distribution yield of 2.67% and a 0.07% expense ratio.

-- The iShares U.S. Real Estate ETF (IYR) has $4.83 billion in assets and tracks the Dow Jones U.S. Real Estate Index, holding 115 stocks. The distribution yield is 2.56% and the expense ratio is 0.42%.

-- The iShares Cohen & Steers REIT ETF (ICF) is concentrated, holding the largest 30 U.S. REITs. The portfolio has $2.4 billion, the dividend yield is 2.32% and the expense ratio is 0.34%.

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11-02-19 1008ET

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