Health Care REIT, Inc. (HCN), Realty Income Corp (O): Searching for Attractively Valued Real Estate Investment Trusts

The bottom line

If you’re absolutely starved for current income, you could certainly do worse than Health Care REIT, Inc. (NYSE:HCN), or Realty Income. If, on the other hand, you take the pursuit of value stocks seriously, you might find a little to be desired with regard to these REITs.

It’s worth noting that Realty Income Corp (NYSE:O) recently provided investors a nearly 20% increase. That being said, Realty Income’s share price has increased so much that the stock’s current yield is now under 4% annualized—not exactly compelling enough for a REIT. Ditto for Health Care REIT—it yields less than 4% at recent prices.

Digital Realty Trust, Inc. (NYSE:DLR), on the other hand, still provides a hefty dividend yield thanks to a stock price that hasn’t skyrocketed like many of its peers. The company recently raised its dividend and yields nearly 5% at recent prices.

While all three stocks will provide dependable income for years to come, I prefer to invest with a more meaningful margin of safety. As a result, I would wait for a pullback before jumping in to Realty Income or Health Care REIT. Digital Realty Trust, on the other hand, looks much more attractively priced and offers a significantly higher yield.

The article Searching for Attractively Valued Real Estate Investment Trusts originally appeared on Fool.com and is written by Robert Ciura.

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