NEW YORK, NY – The current investment landscape has opened up opportunities for yield-seeking investors to find higher returns amidst changing interest rates. With the Federal Reserve’s recent interest rate hikes, investors are now able to target yields above 7%, offering a balance between yield and quality.
While searching for high-yield options, it’s essential for investors to diversify and not solely rely on high-risk equity instruments. Beyond typical choices like BDCs, investors can explore CEFs or option-based ETFs, but caution is needed to manage underlying risks or potential limitations on upside potential.
To access double-digit yields without overexposure to specific asset classes, investors must conduct thorough financial analysis to avoid value traps or unsustainable yields.
Two equity REITs stand out as attractive options for yield-seeking investors. Global Medical REIT Inc. (NYSE: GMRE) operates in the medical office segment with a strong portfolio of properties across multiple states. With high occupancy rates, robust tenant mix, and stable AFFO results, GMRE has shown resilience in the face of changing market conditions.
Slate Grocery REIT (OTC: SRRTF) is another promising equity REIT focused on grocery-anchored properties. With a defensive cash flow model and strong leasing spread statistics, Slate has demonstrated growth potential and resilience to market fluctuations.
Both GMRE and Slate offer around 9% yields, supported by secure cash flows. However, concerns remain about their tight dividend coverage ratios, especially in the face of upcoming debt refinancing. Investors are advised to monitor these REITs closely and wait for additional data points before making investment decisions.
As the market anticipates potential interest rate cuts, the performance of GMRE and Slate will be closely watched to gauge their ability to maintain dividend payouts amidst changing financial dynamics. It’s crucial for investors to stay informed and exercise patience before committing to these high-yield opportunities.
