Lasting bonds: investors' sweethearts, real estate investment trusts go on the offensive with improving fundamentals. (Reits).

Buyside, June, 2002 by Kane, Mari

June, the month of "to have and to hold," might have a fitting application to investors' love of REITs. One could look at the sector by "counting the ways."

By far the biggest attraction is the guaranteed disbursement of dividends, which barely exists in other sectors. These dividends are so safe it would, as JP Morgan's Stephanie Krewson puts it, almost take Armageddon to cause problems with them.

"Occasionally you run across a company whose dividend is not safe," Krewson says. "REIT dividends are what I like to call 'bankable'. Today, the average REIT has a dividend yield of 6.5%, and the dividend payout ratio is just under 70%--that's a comfortable amount of cushion."

Since the beginning of this year, Krewson has been expecting a...

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