This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

REITs on The Street: The Breakfast of Champions

NEW YORK ( TheStreet) -- When it comes to investing, it's always good to keep your portfolio fit and to avoid indulging in too many risky alternatives. That means that you should stay away from the more speculative asset sectors and maintain focus on the most important financial fitness goal: Protecting your principal at all costs.

Accordingly, it's always wise to begin your day with a purpose -- or a goal -- in which you aim to create a consistent routine. By maintaining a repeatable investment strategy you will wake up every day feeling like you're fueling your piggy bank with the "breakfast of champions".

One of the better ways to protect your all-important "nest egg" and to maintain this disciplined routine is to utilize one of the most powerful investment laws in the universe -- the power of compounding. Simply put, this compounding concept refers to re-investment of income to consistently grow your principal over time. When asked to name the greatest invention in human history, Albert Einstein replied "compound interest." Essentially the "law of compounding" is kind of like a free ATM machine where instead of withdrawing free cash (from the ATM), you are instead buying more stock with the income derived from your dividends.

REITs are Excellent Compounding Alternatives

REITs are unique to most other asset classes since they are "forced" to payout high-dividends. More than 50 years ago (1960) Congress created the REIT laws that made it a requirement for companies (that qualify as a REIT) to distribute at least 90% of their taxable income in the form of dividends.

By investing in REITs, the power of compounding can reap significant rewards in a manner in which durable dividend income can grow exponentially to create amazing wealth. Conversely, there are a few select REITs that have made it to the "top shelf," recognized for their attractive consistency and long-term sustainability.

The Dividend Champions

As defined by DRiP Investing Resource Center a "dividend champion" is a stock that has paid and increased dividends for 25 years or more in a row. According to DRiP Investing there are 105 companies that are considered to be dividend champions and three of these are REITs. Federal Realty (FRT - Get Report), HCP (HCP - Get Report) and Universal Health Realty (UHT - Get Report) are all recognized for their extraordinary consistency and reliability in paying dividends.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
FRT $154.69 0.24%
HCP $34.84 1.43%
UHT $55.59 -1.01%
AAPL $95.18 1.64%
FB $117.43 -0.96%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs