After a really busy week we are really worn out (of course at my age that isn’t too unusual). Earlier today I was doing some deep due diligence on one of my new favorites REITs—American Homes 4 Rent (AMH). No I am NOT talking the common shares–I am talking the preferred issues–all 5 of them.
With the fall in income issues in the last month or two we are looking for safety that is consistent with our own risk/reward targets. We always are looking for that security that will provide us with +7% with a bunch of safety. That is a tall order–still.
We want to own some of the max safety issues–i.e. CEF preferreds, but we also want to ‘blend’ them with some issues with the +7% issues.
We had noted a week or two ago that we tiptoed into the AMH-D 6.50% issue, which now has a current yield of 7.25%. There are also 4 other issues with current yields in the 7.23% to 7.40% yields.
Next week (or sometime in the next week) we are going to write in depth on AMH and why we love these preferreds. Remember that AMH was co-founded by billionaire B Wayne Hughes who founded cash machine REITs Public Storage (PSA) and PS Business Parks (PSB). I have studied the balance sheet of AMH twice in the last month and quite honestly am pretty delighted with the strength of it and the amount of free cash flow that AMH tosses off. Very similar to the PSA and PSB balance sheets.
Look for some indepth writing on AMH next week.