O - American Assets Trust: A Quality 6% Yielding REIT For Income-Focused Investors

2024-03-27 08:00:00 ET

Summary

• American Assets Trust is a high-quality REIT that offers income investors a buying opportunity at a low P/FFO ratio of less than 9.0x, well below its 5-year average.
• AAT owns quality real estate in the Western US, with properties in high-income areas like San Diego and Oahu.
• Despite headwinds and expected declines in NOI, AAT's balance sheet is strong and their dividend is well-covered with a payout ratio of 76%.
• Due to properties in the office segment, this has caused more headwinds that some retail peers, suppressing the share price. For 2024 FFO is also expected to be lower than 2023 with a mid-point of $2.26.

Introduction

If you're an investor focused on building your income stream, then you should be loving the bear market the REIT sector has been in for the last 2 years. While it's hard to watch your brokerage account balance dwindle over time, your income stream should be growing. For me, the price doesn't matter as much as I believe the prices of these stocks will be much higher over time....

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