This 11% Yield Isn’t Worth the Risk
It's hard for dividend investors to find desirable yields in today's low-yield world. So, a nearly 11% dividend yield might sound extremely attractive. But with the S&P 500 Index yielding around 2%, you need to ask why Global Net Lease's (NYSE: GNL) yield is more than five times higher.
Here's a quick look at Global Net Lease's huge dividend and why investors should be cautious about this net lease real estate investment trust (REIT).
Global Net Lease is an interesting REIT. First, as its name implies, it uses a net lease approach. So, it owns properties and leases them out under generally long-term contracts (the weighted average lease term is around eight years) that require the lessee to pay most of the operating expenses of the property. Often, it buys a property and leases it back to the previous owner, providing that company a way to free up capital while still retaining use of the asset.
Source Fool.com
