Tags: reits | dividends | shelter | trade war | barrons | real estate

Barron's: REITs Offer Dividends, Shelter From Trade War

Barron's: REITs Offer Dividends, Shelter From Trade War
(Dollar Photo Club)

By    |   Friday, 17 May 2019 02:16 PM

Investors are scrambling for financial shelter as the seemingly endless U.S.-China trade war only appears to be intensifying.

Real-estate investment trusts, or REITs, offer income investors some protection against trade-related volatility, Barron’s explained.

More-defensive REITs, in areas such as health care, self-storage facilities, and residential housing, are expected to hold up amid the trade war than those focused on industrial or lodging properties, Barron’s explained.

REITs offer a “good part of a diversification strategy to reduce risk,” Calvin Schnure, vice president for research and economic analysis at Nareit, a trade association, told Barron’s.

REITs, which typically own income-producing U.S. real estate, are required to pay out at least 90% of their taxable income to shareholders. That makes them attractive to income investors, Barron’s explained.

Cedrik Lachance, director of REIT research at Green Street Advisors, rates as a “buy” for investors Simon Property Group (SPG), which operates a lot of malls and outlet-store centers in the U.S.

“Their ability to drive revenue compared to peers is really impressive,” Lachance told Barron’s.

For his part, President Donald Trump's recent moves against Chinese telecommunications giant Huawei show he "no longer cares if his actions hurt major American businesses," CNBC host Jim Cramer said Thursday.

The "Mad Money" host argued the Trump administration's national emergency via executive order Wednesday, banning American businesses from buying equipment from Huawei and requires a special license to sell components to the company, "was a major escalation from the White House."

"Trump did the same thing to a smaller Chinese company not that long ago, ZTE, although he quickly walked it back," Cramer said. "This one feels different . . . It's clear the president no longer cares if his actions hurt major American businesses."

Yet the stock market did not tank.

"This was a day where we separated the China winners from the China losers, and that allowed many stocks to roar based on good old-fashioned earnings per share," he said.

"Here's how I see it: President Trump is now in charge," Cramer said. "He's in charge of which American companies can do business in China. If you do too much, he'll smite you. If you buy too much, he'll find you. If you rely on them too much, he'll crush you."

"The companies that didn't see this escalation coming, they may get streamrolled, but the ones that thought ahead are being re-rated to more exalted status . . . I think their stocks aren't done going higher," he added.

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Investors are scrambling for financial shelter as the seemingly endless U.S.-China trade war only appears to be intensifying.
reits, dividends, shelter, trade war, barrons, real estate
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2019-16-17
Friday, 17 May 2019 02:16 PM
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