Types of investments

REIT (Real Estate Investment Trust)

A company that owns or finances real estate, such as offices, warehouses, apartments or cell towers, and pays out most of its income to shareholders.

Why does it matter?

It lets people invest in real estate by buying shares. U.S. REITs must pay out at least 90% of their taxable income as dividends.

How do I read it?

On StockLab, REITs are in the Real estate sector. Because they pay out so much, they are often compared using cash-based measures rather than net income. In Brazil, real estate funds (FIIs) play a similar role, but they are funds, not companies.

Example

A REIT that owns warehouses collects rent from the companies that use them and must pay most of it out to its shareholders, so its dividend yield is often higher than that of most other companies.