066 - Which Of The Experts Top 5 REITs Hold Up When You Dig Into The Metrics

If you’re like us, you’d rather let someone else deal with all the admin, headaches, and hassles of owning and managing real estate. 

REITs allow you to do just that and reap the profits. Talk about a win win. 

There’s so many different kinds of REITs from traditional rentals to office spaces, industrial, cell towers and even cannabis. 

With interest rates about to drop, these babies will start popping off. 

Choosing the best REITs will depend on the sector and their metrics. 

We’ve compiled a list of 5 that most experts and successful investors consider to be good and combed through their metrics. We don’t exactly see eye to eye on a few. 

• CCI
• O
• IIPR
• ABR
• PLD

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**DISCLAIMER**
Ticker metrics change as markets and companies change, so always do your own research. The content in this podcast is based on personal experience and is for educational purposes, not financial advice. See full disclaimer here.

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Transcript

Welcome to roaming returns, a podcast about generating a passive income through investing so that you don't have to wait till retirement to live your passions. If you're like us, you'd rather let someone else deal with all the admin headaches and hassles of owning and managing real estate. REITs allow you to do just that and reap the profits.
Talk about a win-win. There are so many different kinds of REITs, from traditional rentals to office spaces, industrial, cell towers, and even cannabis. With interest rates about to drop, these babies will start popping off.
Choosing the best REITs will depend on the sector and their metrics. So we've compiled a list of five that most experts and successful investors consider to be good, but we don't exactly see eye to eye. You're going to want to tune in because the investor favorite doesn't look so good under the hood.
So we're back after last week's craziness. I think the market was down 4.4 percent, so... How many days? Four. Is that bad? Is that worse than August? No, August was closer to eight, so... But... But September is historically the biggest down month.
Yeah, it's going to be volatile and shity, so just don't... It's probably better for a slower climb down than a freaking cliff drop. So just don't look at your portfolio if you can't help it, because it does get depressing that like six months worth of work just disappeared in three days. So what we do, and we've preached about this before, is we look at our dividends instead of our actual portfolio value, because every time we hit 100K, it's like down to 92, 94.
It's ridiculous how it drops off a cliff every time we hit 100K. But our dividends... But if you look at the dividend payouts, five of the six last months were above 1,500, and one of those months hit 1,700, which is freaking amazing. And the six month that we... One of the six that we missed was at like 1,470.
1,484, I think it was. So it was just a little bit shy. So Tim doesn't want to count us hitting our $1,500 goalposts until we have six consecutives, but in my opinion, since the one's at 1,700, I think we hit it.
You're so literal, it's not even funny. You have to be. Numbers are literal.
Literally. Okay. So okay, enough of that nonsense.
This week, we are going to look at the cousins of BDCs. Yeah, last week we covered the best BDCs. This week, we're going to do the REITs.
Our fave. I do love REITs. I seriously love REITs.
Every time I work on this condo, I think more and more and more about how much I love REITs. I would love to just give somebody money to do the real estate crap so that I don't have to deal with any of the negatives and the pitfalls. Well, that's like the best part of investing in REITs is you gain exposure to real estate without having to buy property and run property and manage property.
Fix toilets in the middle of the night, get retarded text messages. So in that regard, because I've had a rental property and she has one and we're trying to make this one as someone else's rental property, hopefully, and it's a huge- Yeah, because that's why we're not keeping it as a rental. We're actually going to make more money, I think, selling it.
Huge pita sandwich. Right. Pita sandwich.
For sure. For sure. The first thing you need to look at when you're looking at REITs is obviously the type of REIT.
There are different ones like residential, commercial, industrial, healthcare, marijuana- And that matters. Data centers, blah, blah, blah, blah, blah. Totally matters because not all of those are good sectors.
Any building in any sector you can think of needs a building. So there's so many different REITs. So you have to feel like you have to kind of do your crystal ball and be like, what's going to be good in two years? What businesses are going to be good? I mean, one of them is going to be warehouses.
Amazon is going to be good. Data centers. I keep talking about data centers.
AI is going to need data centers. I just looked at my computer again. I only have like 11 gigs of free space.
It's just the war on data is just ridiculous and it's going to get worse and worse. So like you have to have a general kind of idea, idea, where you want to go, like what REITs you want to invest in. So you have to look like I'm not going to do the research where I literally just went and typed in top 10 REITs and then I went through and I picked out five that were on the majority of the list.
The second thing you look at obviously is the yield, your divvies. Divvies are super important. That's why you do REITs.
So enough said. That's why you do investing like we're doing, period. Third thing you look at is the financial health, whatever your metrics are.
If it's debt to equity, if it's your interest coverage, if it's dividend coverage, if it's funds from operations, if it's EPS growth, whatever your personal metrics are. We'll get into what I look at when I look at REITs here when we start discussing them. It's kind of vanilla, but it works for me.
Let's see where we're at. You want to know the occupation rates and the lease structures. If you have a REIT and it only has like 80% occupancy, that's bad.
Generally, they're like above 95. Like if you have a REIT that's under 95, you probably need to consider looking at other REITs because that should be like... Because seriously, the housing demand right now of anything, like the demand is high. So if they're below that, that's yeah, bad juju.
So that's one area. And then the second area is you want to look at like the lease structures, like the longer term leases with stable businesses or tenants is preferable. So you have to do a little bit more research on the REIT front than you do for BDCs, but it's worth it.
It's worth it for that safety margin, right? Like this is how you basically cover your ass, CYA. Then you have... Then if you go into any REIT, it'll generally tell you what their holdings are so you can determine what their portfolio diversification is. Much like a BDC, you can go in there and you can find out where they're lending money to.
If they have, say, they only have six tenants, well, that's not very good. You want to have some diversification. You want to have like hundreds usually just because obviously if one defaults.
Because it's just like your portfolio, you don't want to only own a couple of stocks and have one of those go belly up and it just tanks your whole portfolio. Same thing with the REITs. You don't want to only have a couple of tenants.
You want to have a more diversified thing of tenants. That way if one of them leaves, it doesn't put a dent in the income stream. Then you want to look at historical performance just for a look-see.
Like if the REIT, say, was trading at $20 like six years ago, now it's at $4 and it was like literally a straight down, well, that's probably one you want to avoid even if you are a contrarian. There's a reason why it went from $20 to $4 like so quickly. So you want to take a little look-see at the... The way you worded that makes me think of ICON right now.
You want to take a little look-see at the historical performance just to verify that it's bouncing around. It's not just a cliff dive. The growth potential and the market conditions kind of go together.
So you can kind of lump those two together. Growth, obviously you want one that's making acquisitions and buying different buildings, doing projects, doing upgrades on the properties. But at the same time, if the market conditions are like where we are now and they're buying properties, that's not necessarily a good thing because they're overpaying.
So you kind of want to... They kind of go hand in hand. Just take a look-see at that too. But basically, if you just do the valuation and you look at the financial structure, you should be able to pick out good ones.
All this other stuff is just practice for you to actually pick the best REITs when the time is right. And the time for REITs could be right in the next couple of years because when they start dropping interest rates and the REITs will do a definite turnaround, then the valuation is going to be harder to pinpoint. So you're going to have to start looking at secondary things.
Well, we've been getting REITs for a while now because you're usually ahead of the curve on a lot of things. Well, I like the REITs. They yield a lot.
We're in marijuana REITs and a couple of cell towers and data center REITs. So that type of stuff. And again, I always look at it from the fact that if this sector is depressed, it is a contrarian view, but at the same time, because they are paying dividends, if it's depressed, you're going to be picking up more shares and compounding, that when the climate shifts, you'll be making lots of money.
Well, you do have to think beyond the present moment when it comes to REITs. Because the second it flips and these things start to become trendy and the talking heads start talking about them, everybody and their mom is going to pile into them. It's going to push the price up and then you're losing your safety margin.
So that's why we talk about stuff out of sync. We say data centers because AI is going to be such a big thing in the next five to seven years. AI is going to need electricity and data centers.
I can't make bricks without clay. Utilities and REITs that have data centers. You can invest in the data center straight up, but they generally don't pay dividends.
That's why you like the REITs because they can sometimes use leverage and covered calls and things of that nature. Also, I feel like people who manage real estate are like, what's the word? Sharks? Like they're bulls? I feel like they have more entrepreneurial energy. Maybe that's just me.
That could just be me. And then the last thing that you should look at is every time you go into your portfolio or wherever you get your financial information, you pull up a ticker. It'll tell you the volume for the day of that investment.
You want to make sure that you're investing in REITs that actually trade. You need to make sure there's liquidity so that you can trade them. Liquidity basically means there's people trading.
So there's interest because you can't buy or sell shares if there's not somebody willing on the other side. I found a couple really, really look promising REITs and BDCs, but they only on average trade between $4,000 and $10,000. And that's absurd.
Absurdly low. There's no way to actually guarantee that you're going to be able to buy. And there's absolutely no way to guarantee you're going to be able to sell.
You might just be taking a dive off that one. So you want to have hundreds of thousands or millions of volume that way that you can trade at the click of a button. Is there really a concern of getting out if you can get in with a limit order if they do pay good dividends? Yes.
Why? Because if they had a bad earnings or one of their tenants defaulted or something like that, well, everybody's going to be trying to get out. And there's only like 4,000 people buying. So no one's getting in.
So you're not going to be able to get out. OK. I'm just curious.
With that said, we're going to look at five today like we did with the BDCs. These are ones that have multiple investors on Reddit. You have to talk to the thing.
And Twitter and all of them are like, oh, this is the best REIT. And then I looked at like my emails and my publications that I've subscribed to. And then Tim's experience in Spidey Sense, because that totally is exactly.
Of the so-called experts. And I come up with five. I found five that like the majority of investors and experts.
I like the first one. Can kind of agree on. The first one we're going to address is CCI, Crown Castle.
They are cell towers. Yes. The pipelines or the cables.
The fiber optic cable structures. So this is like the Verizon networks. The AT&T networks that they all have to use.
This is a fiber optic, fiber optic, optic, optics, and they actually have cell towers. If you drive down the highway and you see those like big things hanging on. Like there's like big poles and they have like what looks like a spaceship at the top of them.
That is a cell tower. They look satellite like attachments. So the first thing I look at when looking at REITs is the yield.
And Crown Castle CCI does a 5.7. It might be more than that now because I did this a couple of days ago and the market like literally fell off a cliff. So the second thing that I look at is the forward PE. Again, like I don't care about the current PE because that is basically six months in the past to three, like three to six months in the past.
I'm looking at the forward projections with their projected income down the line. So I always look at the forward PE. The forward PE of Crown Castle is 40.5. But I looked at the historical PE ratio for Crown Castle over the previous five years was 64.7. So it's undervalued compared to what it's normally at.
So that's interesting. That's something to think about. It is really interesting.
I mean, these aren't very sexy, which is right up my alley. The next thing I look at is the payout ratio. The payout ratio is if they make a dollar and they pay out $2 in dividends, their payout ratio is like 200%, that type of stuff.
Crown Castle has 180.9 payout ratio, which means 181% of CCI's earnings are paid out as dividends. Holy shit. How is that sustainable? That's not sustainable.
So they're in danger of a dividend cut. So that's something to think about when you're looking at REITs, the payout ratio. They're generally high to begin with, but like that one's way high.
181%. That's ridiculous. Ridiculous.
What? The next metric I look at in REITs is the ROIC, which is return on- Investment capital. Invested capital. ROIC of CCI is 6.3 for the past 12 months and 5.8 average over the past five years.
So decent. Not great, but not bad. Then I look at EPS growth.
I like the earnings per share growth. That basically means that their earnings are growing and that's what every stock should strive to do. Yes.
EPS growth for CCI for the past 12 months was negative 30.5. So that means that you have to remember with REITs, because we're in a high interest rate environment- They're losing money. Yeah, they're going to be punished for that. So the negative 30.5 seems a bit high, but being negative is not the end of the world.
The past five years, the EPS growth was at average 25.3 per year, 25.3%. So it does sound like when the interest rates did what they did that they had a bit of more short-term correction or dip in. Next thing I look at is debt-to-equity ratio. But that could explain that payout ratio, right? Yeah, the payout ratio is high because it went down so much.
That's what I mean because of that EPS- It's generally in the 4.7 to 5.0 range. Next metric I look at is debt-to-equity ratio for REITs and for CCI the past 12 months, it was 74.8%, meaning CCI's total debt of $28.81 billion was 75% of its $38.53 billion assets. Terrible, but that's not great.
Obviously, the lower percentage is better. That means that their assets are covering more of their debt. That one's somewhat high, but not the end of the world.
The next metric I look at when looking at REITs is the free cash flow yield. For CCI, the last 12 months, it was averaging 2.9% cash flow yield, which means of all their revenue taken in and all the stuff paid out, the free cash flow was 3%. And on average, for the past five years, it was 2.1%. So that's actually a pretty decent number.
There's better ones out there, but that's pretty decent. And the last thing I look at there- So there's eight things I look at in total. The last one is the five-year CAGR, which is compound annual growth rate, which is a nerdy way or fancy way of saying price appreciation plus dividends returns over time.
Which you kind of have to do for dividend stocks. For CCI, its five-year CAGR is on average 9.7% per year. So that's pretty good.
If you scroll up there for a second, you see that their EPS growth is 25%. And you see that their actual CAGR was only 9.7%. So that means they're losing like- What is that? 16% in whatever they're doing. So that's interesting.
But 9.7 is pretty good considering the yield is only 5.7 per year. So that means they're actually doing on average a price appreciation of around 4%. So that's good.
So CCI is like B. We'll give that a B. We own it. Not directly, but we own it in some of our funds. Oh, I thought we owned it directly.
No. And then we're going to go on to everybody's favorite fucking REIT. And I'm sorry I swore, but fucking fuck, fuck, fuckity.
Everyone talks about this bitch and I hate it. It's O. Everybody talks about O. And why did you put it on here? Because of all the experts? The experts and the investors. Blusting over it.
It's their favorite. It is like the big boobed blonde at the bar. They're like, oh, so O. If you're not familiar with O, it's a dividend, I think aristocrat by now.
I think it's racist dividend like 50 years in a row or some nonsense like that. That's why they all love it. But why do you hate it so much? We'll get into the numbers and we'll see.
Oh, so it's actually it's not just a bias or a trend, even though Tim does kind of like have an instantaneous. If everybody else is doing it, it must be bad. Generally, it's there and residential with some commercial and some industrial sprinkling.
But it's generally residential. They own a bunch of houses and whatever. O has a 5.2% yield.
Which is worse than CCI. That's less than CCI. It has a forward PE of 47.3, but it's five years PE ratio with 61.8. So again, undervalued compared to what historical numbers say, but not as much as CCI.
Now, here's where we start getting in the crazy shit. O has a 243% payout ratio. That is way worse than the other one.
And that is an ultra red flag. So like how they're funding their dividend and doing dividend increases every year is beyond me. That means they're borrowing a shit ton of money.
Maybe that's why everybody's so freaking hot on this, because they're trying to get people in so they can dump their shares. And then we'll get into some other numbers here. It's ROIC was 3.4% for the past 12 months and 3.5 average over the past five years.
So again, not as good as CCI. It's EPS growth for the past 12 months was negative 20.4. It didn't go down as much as CCI. But for the past five years, its EPS growth averaged only 4.2% per year.
That's not very good. That's not even sustaining its dividend yield of 5.2. What the heck was CCI's? It's 5.8. I mean, that's not too much better. But 5.8, if you look, it covers their yield.
Oh, okay. I see what you're saying. So I'd like to.
And that one's actually less than their yield. So that could explain that 243% payout ratio crap. But this is a good number here.
So maybe this is what everyone looks at. I don't know. The debt to equity ratio for O for the past 12 months was only 38.3%. So they don't have a lot of debt compared to CCI, which had a shit ton of 75.
The free cash flow yield for O was 6.8 for the past 12 months and 5% average yield for the past five years. So they have more free cash flow. So I don't know why their payout ratio is so high.
It means they're either buying more properties or they're paying down debt or they're doing something for them to only have a 5.2% yield raising their dividends so many years. That's weird. And then here's the kicker.
Five-year CAGR is only 2.16, which means per year. So I can see why you have an issue with this one. There's too much conflicting information to give me warm advice.
It has a high PE. If you look at CCI is only 40.5. So this is seven over that. It's payout ratio is 243, whereas CCI is 181.
So it's way higher than that one. It's ROIC is way almost half as less as CCI. It's EPS growth is horrible compared to CCI.
It's debt is better, but it's CAGR is really bad. Like CAGR, like again, I can't stress it. The CAGR number is basically price appreciation or depreciation, whichever, if it goes up or down, plus the dividends over the last five years, you're only getting 2.16 per year.
That's not good. CCI is 9.7. That's not good like at all. Yeah, that's really, really low.
That's ass. So there's everyone's favorite. Here's one of my personal favorites.
That was everyone's favorite. Moving on. Right after everyone's favorite.
So you can see what a good stock looks like, right? It's not great, but it's way better. IIPR, if you're not familiar with IIPR. We gush on this one so hard.
They literally just buy up properties and they lease them out to marijuana. Distilled, like what are they called? Dispensaries. Dispensaries.
Did you know we have one right down the street? Do you remember the other night we were doing a walk and we saw that red glow in the sky? We were like, WTF is that? I saw on Facebook that apparently like, quote unquote, for breast cancer awareness, they open their roofs and that red light shines up in the sky. It looks like super crazy. Like that's some Halloween looking.
So they lease out to dispensaries or farmers that grow marijuana, whatever. Doesn't matter what your personal take on pot is. It's about making money.
It's in demand. Yeah, it's about making money. IIPR's yield is 6.4% compared to O's, 5.2. So yay.
Suck it, O. It's forward PE is only 21.4 compared to O's, which is 47.3. So again, suck it, O. It's five year PE ratio was 48.2. It only has like a 125.2% payout ratio. That's borderline like, okay, like I think you can go up to like 133 maybe around there for the payout ratio before you start saying, well, red flags. It's had a ROIC of 7.9 for the past 12 months and a 6.9 average over the past five years.
So again, that's damn near, that's more than double O. So O can suck it again. So why is the payout ratio of 130% okay? Because they have to pay out 90% of their earnings. I know they have to pay out 90% of their earnings because that's what happens with the REIT status.
So when you're paying out 90% of your earnings, your payout ratio. Sometimes a bit above your actual... Yeah, your payout ratio, 90% of your earnings, sometimes you're paying out more than what you're making. You mean you're like gross? After you take out all the... All the taxes and expenses and stuff.
All the fancy stuff that accounts take out. Okay, that makes sense. So ROIC is way better than O's.
EPS growth is 1.1. The other two we just went over were down ridiculously a lot in the last 12 months. IIPR was actually up 1.1. Yeah, negative 20, negative 30. This one's up 1.1. But for the past five years, the EPS growth was 59%.
Holy crap. So that's spectacular compared to the last two we just talked about. So this bitch is banging.
Debt-to-equity ratio for the past 12 months was only 12.6. They're not actually taking out a lot of debt, which makes sense because they have the cash to buy the buildings. They don't actually have to take out loans to buy the buildings. And then they pretty much lease them right away because marijuana is so in demand.
Their free cash flow yield of 8.7 for the past 12 months is a little... Yeah, it's way back, okay. And a 5.0 average for the past five years. So that's 5.0 is the same as O's.
Oh, O's is lame. And then it has a five-year CAGR of 11.98. Oh, so one of the metrics actually matched O's and you're like, yeah. So you're making like 12% on this bitch.
So yeah. Versus that two on O and the five on CCI. And now we're going to get to another one of my faves.
Ooh, I feel like this one is literally in every list somehow. Is it multiple categories or am I just like hallucinating? I'm hallucinating. It's a REIT, but yeah.
Yeah, I'm hallucinating. Um, ABR. I know ABR is a touchy subject for a lot of people.
It's Arbor. Why is it a touchy subject? We brought it up because it was like they're being investigated by the Department of Justice. Oh, yeah.
That guy on Twitter like gave us crap and oh, he got a little testy moody. And we're like, well, let's see what happens. Who's right? Oracle Tim or fear-mongering people who are selectively looking at only the negatives.
ABR is... Who's to say? Banger. It's a banger. So the experts are still pumping this one? Some are.
What's happening? Yeah, some are. A lot of people are saying by the dip because it's like historically undervalued. Because it's a thing.
And what did you say? Most of these things are under evaluation all the time. Right now they are because the interest rates are high. So they've all been getting beat down the last 12 months.
So they go under investigation? Well, no, this one they're saying that they don't... Their loans aren't up to snuff. Yeah. And an honest person dropped a report or something.
So then they investigated. So then like people piled onto that. So ABR is like a hybrid mode.
It actually owns properties that it leases out. But then it also does the mortgage REIT type stuff. If you're not familiar mortgage REITs, it's where you buy the paper to have people's mortgages.
And you own their mortgages. So you collect their... You own their notes. Yeah.
So they do the paper route. And then they also have physical buildings. ABR kind of does them both.
I like it. And they plant trees. And it has like a BDC kind of feel to it because it lends money out.
So like... That's probably why I'm confusing it. I feel like... So I love ABR. Like I investigate them all you want.
Drive the price down so I can get more shares. I'm cool. One of the biggest things for us is like the owners of the stock or the owners of the company, CEOs, whatever, have been buying up the low shares.
That's what I'm saying. So do I trust random people on the internet? Or do I trust anonymous reports? Or do I trust the actual people that run the company who have millions of dollars invested in it? And the data that we keep seeing, I don't know. So here we go.
ABR, 12.65% yield. So it is a whopper. Whopper.
Whopper. Whopper. It has a 4 PE of only 7.16. And ABR's five-year PE is 11.
Like suspect that to be low right now because, you know, cliff drop, right? Yeah. So it's vastly undervalued. That's like 37% undervalued.
That five-year one seems kind of low too. Or is it just... Because they fall into... They're a hybrid. They fall into the residential and the mortgage.
So like they have a different metric than the other ones that are just strictly buildings. Has a 91% payout ratio, which is fine. That's outstanding, actually.
It's like perfect, actually. Because they have to pay out 90%. 90%.
90%. So they're only 1% above that. They're like lean and clean.
So their ROIC is a bit low. But what else? 2.2. For 12.65% yield, I'm cool. We'll get to why it's okay here in a second.
Yeah, their ROIC is only 2.2% for the past 12 months. And 2.8 average over the past five years. So super low.
Even if you look at O, the one I was shit talking a minute ago. It was 3.4 and 3.5. So it's like almost double. So you'd be like, oh, O's better.
EPS growth for Arbor for the last 12 months was negative 17. So it's doing better than O by 3%. But the past five... Yeah, because O is 20, negative 20.
Oh, I somehow 30'd half that. Never mind. Don't ask my brother.
But the past five years, EPS growth averaged 6.7%. So it's not as well as O's. Is it? 4.2. Oh, 4.2. Oh, yeah. So it's better now.
So O can suck it. Suck it again. And the debt to equity ratio for Arbor for the past 12 months was 77.1. So again, that's kind of high, but it's not the end of the world.
If that number is over 100, that's bad. If it's on the high end, like where we're at here, 75, 77, 80%. You might have to watch the earnings reports to make sure that something doesn't change.
Because if it doesn't... So think of it this way. But these are naturally having high debt, right? If their debt was called back and they didn't have the money to pay it off, they would actually have to liquidate their assets. If they owe, say they had a debt to equity ratio of 130%.
So they owe more than their assets actually provide. They're 30% in the hole. That's what happened during the 2008 crisis.
So the fact that it's under 100% is good. So if the debt's called back, they'll still have 22.9% of whatever assets available to them. Man, you're good at subtracting.
I suck. The free cash flow yield is 14.4 for the past 12 months and 12.8 average yield for the past five years. Let's go back up here to Sucker O.
It's 6.85. Sucker O. Oh, my God. You're killing me.
So that's way better than them. And then you have to... Here's why all these numbers that are like borderline... Don't really do anything for me. Because the five-year CAGR of Arbor is 11.63. So you're making 12% per year.
So you're basically like... So what that's saying is you're trading sideways. Because you have a 12.6% yield and you're making 12% in your CAGR. So it's been trading sideways, which is perfect.
Because that means you're picking up shares at an undervalued price. Discounted price. Which means when the hell this thing turns around, you're going to be sitting pretty.
So I love... I actually really love when the yield... These are your favorites, right? The yield and the CAGR are pretty close to each other. Because that means it's trading sideways and you're just picking up shares. All the while, it's doing that consolidation crap.
And then here's the data. That's Arbor. Arbor's awesome.
IIPR is better. But IIPR costs like $110, whereas Arbor's like $12. Yeah, that one's more expensive.
So you can get more bang for your buck out of the Arbor. But I would seriously... Either one of them. Pick them up.
And then here's the data center everybody slobs on. But... Hey, I like data centers. I'm not a fan.
But it's PLD. It's Polaris. I don't know how to say it.
But like... Is there a better data center one? Not that investors and experts agree on. What about us? I could probably find a couple. We don't have any? No.
Do we have something that owns something? Iron Mountain's better. Is that a data center? Yeah. Iron Mountain's better.
And then like I'd have to look at some of like our Closed-ended funds what they're holding. I was gonna ask you if they're part of other funds. I assume that's how you're doing it Yeah, okay.
So that's like a you remember when we discussed closed-ended funds. This is a complete sidebar Like if you're closed-ended fund is like a REIT focused closed-ended fund and it has access You know It has a exposure to like 20% of the REIT you don't have to worry about investing in REITs per se Because you already covered it with your closed-ended fund unless there's one that they don't own that you really like that's possibly one of these or but I don't generally do closed-ended funds or ETFs when it would that deal with real estate because I have found that I can actually get higher Yield higher appreciation with the individual stocks So then again, I ask why the hell don't we have a data center one because I don't feel like they don't really have a good yield It's better to do closed-ended fund because they'll tie that up with the other stuff and they'll get like Six or seven percent you love I'm backseat portfolio driving. It's like if you look at Polaris This is like one of the better ones.
It's it only has a three point one percent yield They don't yield a lot. They need their money for tech and nonsense expanding their data. Yeah, that makes a lot of sense for For P is a forty three point five, but PLDs five-year P a ratio was forty one point seven so this is one of the few ones that the experts and And the other investors who agree with the experts are like completely wrong about this is overvalued like just looking at the PE This is super overvalued You shouldn't even touch it with a pole, but And we'll get it we'll get into why there's other numbers that like you should not look at Polaris Currently, I mean down the road possibly but right now no It has a hundred eight point four percent payout ratio, which again you'd like whatever like reads terrible Only has a three point zero two ROIC for the past twelve months and a two point six seven average over the past five years So that's about average what we have going on with all these EPS growth for the past twelve months was negative thirty two point five That is actually worse than the first one CCI, but the past five years EPS growth averaged about 17.8 percent per year.
So you're getting a heck of a difference Jesus getting more raped the last year. It went down a lot It's still over value. Yeah.
Yeah, that's a that's the equity ratio for the past twelve months was fifty one point six percent So that's actually a really good number really low Maybe that's why they're EPS and all that crap because they're Here we go. Here's like the one that's like the absolute deal-breaker for me Like they're free cash flow flow yield was one point five for the past twelve months, which okay decent But for the past five years their average yield for free cash flow is only zero point two six Means they're paying out all their money and interest Dividends and whatever like taxes and everything else They don't have a chance to grow because they're gonna have to borrow more money But they're trying to keep their debt lower. So like they're literally just treading water their five-year cages eleven point six nine Fully expect that to be coming down.
It's not there's not a chance in hell That's gonna be close to twelve percent in the next couple years. This one is of all of the five I listed This is the one if you have any portfolio sell it if you don't don't even look at it even more than is this worse? Oh, no. Yeah, it's way worse.
No, okay, Lisa. Oh, you're making Two point six, but it doesn't have it like he has free cash flow yield and it has a better and like you have a chance To yeah. Okay, you're making five point twos.
You're making like 60% more or 40% more in your but like for real for real for real it would be IIPR, ABR and CCI from this list or the like the three that I can get behind that most investors and experts agree on On what do we take from all this data? Because it was a lot of data, but hopefully it was fun Like I said for starters everyone's absolute favorite REIT is kind of sick gross ass I don't know. I don't know why everyone loves the stock I get the years and years of dividend increases like I guess that's a like a security blanket Well, they're gonna increase their dividend, but the metrics and the numbers say that's not sustainable. They're gonna cut their dividend at some point That's that thing people do that.
Hope you know can sit or past precedent future, but you're sitting there on a Probably a cloud a 1% Dividend increase if it's even that every year and then you're only making 5% but then you have all those red flags Oh to me is Almost as bad as PLD. Well, it makes sense to me. IIPR is the best and a BR which is when we hold So again, but that's our interpretation of what's going on with that.
Well, I can tell you like the two investigation. Hold on We've had IIPR for Almost 10 months and we are up 34% in it overall and we have Gotten a lot of we got 330 some dollars in dividends. We've only got two dividends So like we're doing really well on that one.
That one's awesome That's in the retirement account because I don't ever fully expect to sell the IIPR for ABR. We've held that one for This was a 15 months and we're up 37 point three four percent well before this for this last Big big dip in September dip and we have it in the retirement account as well We've held in the retirement account since May of last year So two months longer than we have in our van life portfolio, and we're up 41% Oh my god That's maybe ours just crushing it. So all those people that talk show in a BR can Go invest in Oh and they can suck it Can go invest in Oh And that's what we have about rates.
Now next week is gonna be a super awesome Little get together with us here. We're going to actually Go through our August dividends. I was gonna say I don't even know what you're talking about.
Yeah, I'm gonna actually tabulate Oh, we're gonna actually tell you what we've made from what that's exciting So I'm gonna tell you what we've made in August and I can't tell you I'm excited. We hit the 1500 mark I don't care what you say So we're gonna go through all the dividends we collected in August and all the shares that we got and all the all the cash That we got so like next month is gonna be banger or next week's gonna be banger It's gonna be about August and then I'm going to try to do that every month or maybe every two months Depending it's like the numbers look similar say like August September's numbers look similar I'm obviously not gonna come back and say well September's the same as August Thanks for listening because that would be a really pointless Well, I think that'll be really pertinent because the market is like so gonna be such a shit show for September That you got to focus on the positive stuff and looking at your actual income is a great way to do that instead of looking at all the bloodbath that is the actual value of your Portfolio because it's like one of these times we finally will stay above a hundred thousand But it doesn't really matter considering we only put seventy four point What was it seventy four thousand five hundred ish in the portfolio and we haven't contributed anything since and we're almost up to 100k We first started out we were only making like 600 a month Yeah, so the fact that we've hit our first milestone of 1,500 even though Tim disagrees So you have to think like I literally had no fucking clue what I was doing I was kind of like a little bit in the income investing and then a little bit with the old growth So a little bit in the growth and a little bit in the constraints I was like kind of all over the place and we were making 600 a month when we first started out and The portfolio was getting hammered We weren't actually making enough in dividends to cover like our monthly losses Which we've actually been doing the last couple months even like they've been volatile and they've been down We've actually covered our portfolio losses with our dividends for the month for our portfolios not going down so like I the the trajectory of my Learning and understanding of this took me from like 2016 to 2019 and then like when to win Cove it happened I was just buying up all the dividend shit. I could find because it's like yeah, everything's on sale And like I think we're gonna thank you like perfected your strategy to with your intuitive like whatever the heck and I have a firm Belief that everybody thinks that the interest rates are gonna be interest rate cuts are gonna be awesome I think what we saw this week's gonna happen at least another week in September So you'll have a chance to get in and buy stuff when that happens That towards the end of the end of the month if it doesn't keep going next month I mean I kind of almost wonder if the People are realizing the interest rate cuts might not be as good of a thing as they originally thought because people are fickle Well what they were doing is they're focused.
Okay, they're gonna cut the rates. They're gonna cut the rates They're gonna cut the rates. That was the narrative that was drive first They're focused on a short term But it was a I was driving the market and then it was the interest rate cuts are driving the market now that they got What they wanted they're looking at actually the fundamentals of the economy and they're like, wait a minute, though Wait a minute inflation might get worse inflations still like two point They say 2.7 or 2.5, whatever the hell it is Like the employment numbers like there's only a hundred and four or a hundred five thousand jobs of Offered in August when they were expecting like 165.
So they are like 60,000 below that unemployment rate did go from four point three to four point two So that means people are just taking whatever the hell they can find now because obviously every year we have a cyclical cyclical pattern Once school starts there's actually less jobs available because although all those kids are going to school and they're Parents can go back to the economy knows that the kids are going back to school So they're not gonna actually have those jobs available. So that makes sense and like we have the same pattern where The employment numbers creep up from like April through like July August and then August they drop and then they come like November They'll start creeping up again for November December in January and then after January, they'll drop again Like it's it's the same pattern over and over if you if you're a nerd like me and you look at that stuff Tim is so good at patterns. I'm just like what today like it's nothing nothing big came out last week that justified a 5.5% drop.
Yeah, it's just I think people are taking profits No, no, September is gonna be hella volatile because all this if you look at the history like September is always terrible But I don't know why they waited and then I thought maybe a fiscal year because the government's fiscal years in September and the same Thing kind of happens at the beginning of December to January people dump stocks to like lock in I don't know if that makes sense from a fiscal standpoint I use all my dry powder to buy it during the August dip Oh, I know dry powder if we hide and I feel so bad like we could sell a condo and then have all the dry powder but I suck apparently and then I'm actually going to do another I have after next week's dividend one The podcast following that is actually going to be I'm going to be covering the yield maxes I've actually had for a year. So I'll have a year worth of data to go through. It's a Four or five of them So I'm actually gonna have five years or a whole year of data on five of the yield maxes So you can see the the total like the pride what the price was what it is currently how much was collected It's it's gonna be awesome.
That actually should be a fun episode I actually think I should see if I can find other people's what they've had happened with their yield maxes as a Comparison because if you don't approach your maxes is the same strategy as we do you definitely can lose your ass Um make a note that I just said that next week's And the week after that is Like in three minutes Ten second Tom over here Hi, Tom, good to meet you. Hi, I'm Tom But that's it that's it in the next two weeks you're gonna be bangers, so hopefully I mean it falls comments So that's the awesome part. I can sleep the windows open and like it's glorious.
So trying to keep things Entertaining but by giving you information like well, I want to cover the yield max stuff I'll give you the numbers and I'll actually I'll reemphasize what we do with them So that if you want to duplicate that you can as well as the dividends I mean, I'll tell you I'm gonna try to come up with buy-in prices for like that did like the Challenging Tim to try to come up with like because we're in when we get in and I'd like him to at least have like a Range for people to be like, okay What am I looking at if I'm trying to get and I think that would be helpful for people So I can come up with a target price Like I just looking at the numbers and past the historical stuff and then doing like research So I come up like what I'm in I have like a target price to win to sell it because it's only gonna go up to I think that might be good enough Like just a target that way you're not but actual Buy-in price is different because you actually want to have like some appreciation So the buy-in price is obviously gonna be lower than the target price so I guess I probably thought probably come up with like a equation and run it through and see like were you the target like the the target price is like 15 the buy-in price should be Like it's 20% or 15% less than that So you get at least a 15 or 20% appreciation plus the dividends And it's gonna be exciting because you're gonna test this crap out on me, aren't you? I'm gonna test it out on the war portfolio and see But then you're gonna see if I can actually replicate and not apparently lose so that is what I'm doing I'm in there and I'm gonna be trying to do like math math equations Algebra, I haven't used algebra since like a high school and they'd lied to me and said I was gonna use it and I haven't Used it. Dude. I use it all the time.
I don't know how you don't use it So now I'm gonna try to use algebra for the first time in like 30 years. I don't understand I'm less nerdy than you and I freaking that right Reason to tune in cuz like I an old man trying to do algebra for 30 years. That just sounds hilarious That's that and then we're gonna go pick up a stray cat now By stray cat, we may very well be like quote-unquote adopting a homeless person Who wants to get into van life? I need a helper monkey.
We go for walks all the time I let her go for a walk by herself one night. She goes over her friend's house She's like hey, I found I found a stray cat that we can bring home. It can be my tool bitch You're not willing to do it and I want to get the hell out of here and he's willing to literally do stuff for Like a place to sleep shower and a little bit of food money and I'm like that sounds like a plan So she got a stray cat.
We're gonna go meet him tonight. We'll let you know the next episode how that goes It could be a disaster, but it could actually be really cool. Who knows.
So that's that. Have a good week See you guys on the flip side.