Restaurant REIT Looks Tasty to Me
I have been looking Trust Street Properties (NYSE - TSY) for a while now and am about to pull the trigger on some shares. Not only is it yielding just under 9% (under $15 a share; paying $1.32 a year), but there is a huge bonus. This REIT pays monthly!!!! That's right. You get some cash in hand (or dividend reinvestment) each month. That is huge. BTW, check out the dividend history since 1986, looks pretty fattening huh?
This REIT is all about restaurants and makes some of its profits via buying and selling properties. Some analysts don't like this, but I think that the market for restaurants as investments is pretty liquid. I would be worried if a REIT like EOP tried to make profits by flipping assets constantly (though they probably do), but with restaurants I am less concerned as that is a healthy market with lots of buyers. The run a 1031 business I believe.
Try this on for size -- lets say you buy 135 shares (about $2,000). With the first months dividend (11 cents per share) you can buy another share. By the end of the first year you have picked up another 11 shares to earn for you!!! That sounds pretty nice to me. Any one else out there think this stock smells delicious?