2 High-Yield REIT Stocks to Buy Hand Over Fist and 1 to Avoid

Group 1: High-Yield REITs Overview - The average yield for real estate investment trusts (REITs) is approximately 3.9%, significantly higher than the S&P 500's yield of 1.2% [2] - AGNC Investment offers a notably high yield of 14.9%, but this may indicate underlying risks rather than attractiveness [3][5] - Innovative Industrial Properties provides a yield of 7% and focuses on marijuana-related assets, which presents both opportunities and risks due to regulatory uncertainties [6][7] Group 2: AGNC Investment Analysis - AGNC Investment's dividend has been declining over the years, which raises concerns about its sustainability as an income investment [4] - The total return from AGNC can be improved through reinvestment of dividends, rather than relying on the dividend for living expenses [4][5] - AGNC is characterized as a total return investment rather than a traditional income investment, making it less suitable for typical dividend investors [5][11] Group 3: Innovative Industrial Properties Insights - Innovative Industrial Properties owns 108 properties across 19 states, primarily focused on marijuana cultivation facilities [6] - The legal marijuana market is projected to surpass the beer and spirits sectors by 2028, indicating strong growth potential [7] - The adjusted funds from operations (FFO) payout ratio was around 85% in Q3 2024, suggesting room for stability before a potential dividend cut [7] Group 4: VICI Properties Overview - VICI Properties invests in experiential properties, particularly casinos, which are resilient to economic fluctuations [8] - The dividend has consistently increased since its initiation in 2018, with an annualized growth rate of 7%, outpacing historical inflation rates [9] - The average lease term for VICI's properties is 41 years, with regular rent increases, ensuring stable income [10] Group 5: Investment Considerations - Identifying high-yield stocks is straightforward, but discerning which ones are worth owning is more challenging [11] - AGNC Investment may not be suitable for yield-focused investors, while Innovative Industrial Properties and VICI Properties present stronger business fundamentals to support their high yields [11]