Kimco And Brixmor: How To Earn 15%-Plus Long-Term Annual Returns On Two 5.4% Yielding REITs by Brad Thomas
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Summary
- Our followers requested an update and comparison article on Kimco and Brixmor.
- So, let's take a look at their strengths as well as weaknesses to see whether these 5.4% yielding REITs are right for you right now.
- Also, learn at what prices each is potentially capable of delivering 15%-plus long-term CAGR returns and in the short term, the kinds of gains like we've seen over the past.
- Looking for a portfolio of ideas like this one? Members of iREIT on Alpha get exclusive access to our model portfolio. Get started today »
This article was coproduced by Dividend Sensei.
As REIT analysts, we have the goal of helping investors maximize safe long-term income while achieving strong total returns to help them reach their financial goals.
Undervalued REITs that offer generous, safe and steadily-growing dividends can be a great way of achieving that. Let's consider the example of retail REITs Kimco (KIM) and Brixmor (BRX).
Kimco And Brixmor Since Oct. 15 Dividend Sensei's Recommendation
(Source: Ycharts)
When Dividend Sensei recommended these REITs back in October 2018, they offered safe 7.2% to 7.5% yields, and as you can see, investors who bought both (while using proper risk management for their needs) have done very well indeed.
KIM and BRX have delivered total returns that not just smashed that of the S&P 500, tech-heavy Nasdaq and Amazon (AMZN), but also the broader REIT sector, which has been the best performing sector of 2019.
(Source: YCharts)
Year to date, in 2019, few companies on Wall Street can match KIM and BRX, whose nearly 50% total returns this year have surpassed not just the broader market, but even perennial market darling FAANG stocks such as Facebook (FB), Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), and Amazon (AMZN).
Our Marketplace members have requested an update and comparison article on both REITs to provide an update about whether today still represents a good time to buy them for a diversified high-yield portfolio.
So, let's take a look at both Kimco and Brixmor, their strengths as well as weaknesses, to see whether these 5.4% yielding REITs are right for you right now. Also, learn at what prices each is potentially capable of delivering 15%-plus long-term CAGR returns and, in the short term, the kinds of monster gains like we've seen over the past year.
https://static.seekingalpha.com/uploads/2019/10/17/330973-15713412003764558.jpg
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Dividend Safety: Brixmor Wins By A Nose
Our motto is "quality first, valuation second and proper risk management always." Our three-part quality score (3- 11 point scale) is based on dividend safety, business model, and management quality/dividend friendly corporate culture.
- 7 = Average quality company (basically the typical S&P 500 company corporation)
- 8 = Above-average quality
- 9 = Blue chip quality
- 10 = SWAN (sleep well at night) quality: A higher caliber of blue chip
- 11 = Super SWAN: As close to a perfect dividend growth investment that exists on Wall Street (46 companies on our 222 company and counting Dividend Kings Master List)
Kimco and Brixmor are both level 7 quality companies, which means about average quality relative to the S&P 500. This is the lowest quality score we ever recommend but doesn't mean either REIT is a bad dividend stock.
.. Read the Full Post On Seeking Alpha
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