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No. of Recommendations: 5
I liked his question too, especially since I've been grappling with a similar question myself. Of course, I've got a particular set of things that I look at, dividend safety & growth being the top two. Maybe the only two, come to think of it (as everything else can fit under those categories). Others may be more interested in total return, which is an entirely different animal.

My favorite sector is Manufactured Housing, since Ralph and others have pointed out that this is probably the most stable of sectors, through bad times & good. At present, I like SUI the most in this sector. Paying almost 6%, with a decent (though not great) long-term record of raising dividends at or above the CPI. It's also got the lowest payout ratio of the 3 (MHC & CPJ being the others in that sector), so maybe their record of dividend increases will improve. It sells for around NAV (according to RSR). This is my #1 personal pick; YMMV.

I recently commented on CPJ, which has a higher yield, sells at a discount to NAV, and has a better record of raising dividends. But they've run into difficulties of late involving a recent takeover, and a new computer program, and aren't expected to grow FFO much this year. More troublesome to me is a high payout ratio, but they do have decent coverage ratios. Since I already own as much SUI as I like, I may add to my CPJ holdings, but only if I can get it at a bit better discount to NAV than the current 9% or so.

The REITs I'm currently considering for purchase include BRE, BXP, LRY, PP, and RSE (RSE being one that no one seems to like, for some reason). I'm getting so desparate to find something to purchase, I'm including 2 REITs that are unrated by Moodys (BXP & PP), and am even willing to pay modest premiums above NAV for most of these. Still, they all seem fairly attractive to me relative to their peers. I just hope the fact that I'm now willing to bend my "rules" isn't yet another indication that a top is near. I better save some cash, just in case. :)

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