Management Makes These the Two Best REITs for Income Investors

Earnings season offers unique opportunities. This is a time when management teams host conference calls for Wall Street analysts. Listening to calls or reading the transcripts gives me insight into how well companies are managed.

I believe that most analysts and investors do not pay enough attention to management teams and whether or not they do a good job.

And listening in this earnings season has made me surer than ever that these are the two best REITS for income investors…

Most stock analysis focuses on financial results. Those results are projected into the future to determine the potential value of a company’s shares. Financials provide a snapshot of the company’s performance for the defined period, usually a calendar quarter. The numbers are scrutinized to determine if the business is operating well or if there could be problems.

However, economic and business conditions constantly change. Analyzing financial results to project from the past into the future leaves out how a business will be affected by changes in the economy and the business sector in which it operates.

When I compare companies in a sector, such as real estate investment trusts (REITs) or business development companies (BDCs), I focus on management’s comments and actions taken to keep their businesses on a positive trajectory. Over the long term, superior management will produce superior results. The better management teams typically share much of what they see and do during the quarterly calls. Here are a couple of my favorite companies and some comments from the recent quarterly discussions.

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