We are sharing an attractive income-generating options trade that exists because of current market conditions. Specifically, after completing a major portfolio restructuring in recent years, healthy-dividend healthcare REIT HCP is now well-positioned for strong income in the years ahead, but has recently sold-off thereby creating an attractive income-generating options trade opportunity. We believe this is an attractive trade to place today, and potentially tomorrow, as long as the share price doesn’t move too dramatically before then.
REITs have been on fire this year, as you can see in the following chart. REITs (XLRE) are up more than 30%, while the S&P 500 is up just over 20%. And popular, 4.6% dividend yield, WP Carey REIT is up an impressive 42% year-to-date. For those of you who wish you’d have bought into WP Carey at a lower price (and for those of you who may want to buy more), there is another way, besides just sitting and waiting for a sell-off so you can “buy low.”
As we recently wrote about in detail here, Stag Industrial (STAG) pays big monthly dividends (5.1% yield) and it has “more octane” than other REITs. The “octane” generally makes Stag shares go up more when the market is strong, healthy and calm, but down more (compared to other REITs) when the market sells off. And the market sold-off hard on Friday, and Stag’s shares were down a large 4.75%, thereby creating this very attractive high-income-generating options trade opportunity.
We’ve written about the attractiveness of healthy dividend REIT Simon Property Group (SPG) in the past, most recently here. But we’re highlighting it again now because the valuation and income available are increasingly very attractive. The narrative that the Internet will kill all brick-and-mortar stores is way overblown in Simon’s case, so we are sharing this very attractive options trade opportunity.
Big-dividend mortgage-related REIT, New Residential (NRZ), is down 16% in the last few months while the overall market (SPY) is still up. This article explains why it fell, what will likely happen next, and we conclude with an attractive income-generating options trade that you may want to consider.