Sleep-Well-At Night REIT Yields 8.6%, Still Has Upside

This company is a high-quality income vehicle. Strong origination growth attests to robust fundamentals in the U.S. commercial real estate market. It has a large floating-rate investment portfolio that makes the REIT a preferred holding during the current rate hiking cycle. Shares sell for a sensible core earnings multiple. An investment in the stock yields 8.6 percent.

Starwood Property Trust, Inc. (STWD) remains a compelling income vehicle for investors who require high, recurring dividend income, and who are also looking for potential capital gains. Thanks to Starwood Property Trust's large floating-rate debt investment portfolio, the commercial property REIT and real estate finance company has considerable interest rate upside in a rising rate environment. Importantly, Starwood Property Trust has one of the best dividend coverage stats in the sector, which translates into a high margin of safety for the dividend. An investment in STWD yields 8.6 percent.

Source: Seeking Alpha

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