Ken Heebner’s Capital Growth Management’s Small Cap Picks Include Herbalife Ltd. (HLF)

The 13F showed Heebner disclosing ownership of 1.2 million shares of another self storage REIT, Sovran Self Storage Inc (NYSE:SSS). While this company pays a somewhat higher dividend yield than Extra Space, at 2.9%, its dividend has been much more stable in recent years: Sovran Self Storage Inc (NYSE:SSS) made quarterly payments of 45 cents per share from mid 2009 through the end of 2012, and then only hiked its distributions to 48 cents per share. It’s also considerably smaller than Extra Space in terms of market capitalization.

Capital Growth Management kept its holdings of RLJ Lodging Trust (NYSE:RLJ) constant over the course of Q4 at 3.8 million shares. RLJ Lodging Trust (NYSE:RLJ) is another REIT, but one which invests in full service hotels. It pays the highest dividend yield of the companies we’ve discussed in this article, at 3.6%, and so might be worth considering as an income stock. The company only went public in May 2011, so it does not have a long history of paying dividends, but RLJ has increased its quarterly payments by about a third in that time.

We’d be interested in taking a closer look at Foot Locker on a value basis, and while we certainly would play it carefully Herbalife Ltd. (NYSE:HLF) is cheap enough that the company needs to do very little to prove undervalued at current prices. As far as the REITs, RLJ certainly pays a decent yield but we’d advise income investors not to concentrate too much of their portfolio in real estate investment trusts.

Disclosure: I own no shares of any stocks mentioned in this article.