Dividend yield is the ratio of dividends paid per share to the stock price. Focusing solely on the dividend yield when it comes to Real Estate Investment Trusts (REITs) may not be the best approach for several reasons:
The dividend yield can fluctuate: REITs are subject to fluctuations in interest rates, economic conditions, and the overall performance of the real estate market and stock market. Dividend yields can fluctuate daily as a result and it is important to assess whether a lower dividend yield actually translates to lower quarterly dividends received. A lower yield could have happened because the stock price increased – and that is not a bad thing!
