0% yield environment got you down? Earn 5% here.

The good ol' days of earning 5% in a savings account or with certificate of deposits (CDs) is long gone and there is no sign it will return anytime soon. Global central banks have taken a page out of Japan's book and will keep interest rates at zero until something good happens or something breaks. Well Japan has had zero rates for decades.

One sector in the US is still able to provide some yield averaging around 4% through dividend payments. Today's company is thriving and provides a strong dividend.

The company is structured as a REIT (real estate investment trust). They are required to distribute at least 90% of income as dividends in order to qualify for favorable tax treatment. This requirement is a major reason why the dividend yields in this sector are so high.

The reit yield spread is very attractive verse other opportunities such as stocks, corporate bonds, or treasuries. The average reit pays about two percent more than stock indexes and before the recent rally in yields were paying three percentage points over the 10 year treasury bond.

Washington Real Estate Investment Trust (WRE)

This company is a great opportunity today as they have survived the pandemic with flying colors. Through the last year the company was able to collect 98% of rent due in its multifamily properties compared to 94% for the industry as a whole. (shopping centers, malls, office space are the areas to avoid as the pandemic hurt them badly and possibly changed some of these models forever)

WRE found the sweet spot of multifamily properties with 85% of the portfolio considered class B. This are expensive but not the high luxury apartments of class A. (classed range from A at the top all the way down to D)

Class B is doing well as their tenets are decently employed who should be able to survive most economic downturns and many stayed employed virtually through the pandemic.

WRE is set to continue to thrive, it offers a 5.3% yield and is a great buy up to $26 per share.

Divider provided by barge

Disclosure: I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article. The information provided should NOT be considered advice. The topics discussed are risky and have the potential to lose a substantial amount. I am not an investment professional and therefore do not offer individual financial advice. Please do your own research before investing.

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