REIT Expert's Picks for "Mom's Portfolio"

Focus: REITs

Brad Thomas Image Brad Thomas Editor, Forbes Real Estate Investor

I recently attended The Money Show in Orlando where I spoke to many retirees who were seeking reliable sources of income, notes Brad Thomas, real estate investment trust expert and editor of the Forbes Real Estate Investor.

As the editor of The Forbes Real Estate Investor, I am keenly focused on helping retirees reduce investment risk and sleep well at night. In my newsletter  I recently decided to build a new REIT collection called the Moat-Worthy REITS For Mom’s Portfolio.

Included in the portfolio are four of my favorite picks; I'll recap my BUY recommendations as follows:

Omega Healthcare (OHI)

Omega is the largest “pure play” REIT that invests in Skilled Nursing buildings. As of Q4016 Omega had an operating asset portfolio of 981 facilities with approximately 99,000 operating beds. These facilities were spread across 79 third-party operators and located within 41 states and the United Kingdom.

Omega’s leverage remains exceptionally strong as does its balance sheet – as of Q4016 the company’s net debt to adjusted annualized EBIDTA was 4.7x and the fixed-charge coverage ratio was also 4.7x.

The company has $1.2 billion of combined cash and revolver availability to fund future investments and provide capital funds for existing tenant leases.

Omega’s latest earnings were in-line and the adjusted FFO guidance for 2017 was $3.40 to $3.44 per share and the funds available for distribution (or FAD) guidance was $3.10 to $3.14 per share.

Tanger Factory Outlets (SKT)

Tanger is the only “pure play” REIT that invests in Outlet Centers.