In order to demonstrate this, we chose three REITs and compared the preferred stock of the REIT to the equity of the REIT. While the data shows a wider range of prices for the common stock relative to the preferred stock, investors also want yield from the REIT sector. On average, REIT preferred stock has higher yields than the common stock as preferred investors do not experience the same amount of capital appreciation potential that common stock investors do due to the fact they are not true owners of the REIT and will not receive dividend increases if they are declared. Similarly, the Public Storage preferred stock yields over 1.5% more than the common stock. For investors whose objectives include income and portfolio stability, REIT preferred shares are well worth considering.

Source: Forbes June 01, 2017 02:28 UTC