Kite Realty Group Trust Is Maintained at Overweight by Keybanc

Believe it or not, seniors fear running out of cash more than they fear dying.

Also, retirees who have constructed a nest egg have valid justifications to be concerned, since the traditional ways to plan for retirement may mean income can no longer cover expenses. Some retirees are now tapping their principal to make a decent living, pressed for time between decreasing investment balances and longer life expectancies.

The tried-and-true retirement investing approach of yesterday doesn't work today.

Years ago, investors at or close to retirement could put money into fixed-income assets and depend on appealing yields to generate consistent, solid pay streams to fund a comfortable retirement. 10-year Treasury bond rates in the late 1990s floated around 6.50%, but unfortunately, those days of being able to exclusively rely on Treasury yields to fund retirement income are over.

That means if you had $1 million in 10-year Treasuries, the difference in yield between 1999 and today is more than $1 million.

And lower bond yields aren't the only potential problem seniors are facing. Today's retirees aren't feeling as secure as they once did about Social Security, either. Benefit checks will still be coming for the foreseeable future, but based on current estimates, Social Security funds will run out of money in 2035.

So what's a retiree to do? You could cut your expenses to the bone, and take the risk that your Social Security checks don't shrink. Or you could find an alternative investment that provides a steady, higher-rate income stream to replace dwindling bond yields.

Invest in Dividend Stocks

Dividend-paying stocks from low-risk, high-quality companies are a smart way to generate steady and reliable attractive income streams to replace low risk, low yielding Treasury and bond options.

Look for stocks that have paid steady, increasing dividends for years (or decades), and have not cut their dividends even during recessions.

One approach to recognizing appropriate stocks is to look for companies with an average dividend yield of 3% and positive average annual dividend growth. Numerous stocks hike dividends over time, counterbalancing inflation risks.

Here are three dividend-paying stocks retirees should consider for their nest egg portfolio.

ADT (ADT)

is currently shelling out a dividend of $0.06 per share, with a dividend yield of 3.06%. This compares to the Security and Safety Services industry's yield of 0% and the S&P 500's yield of 1.54%. The company's annualized dividend growth in the past year was 57.14%. Check ADT dividend history here>>>

Kite Realty Group (KRG)

is paying out a dividend of $0.27 per share at the moment, with a dividend yield of 4.05% compared to the REIT and Equity Trust - Retail industry's yield of 3.87% and the S&P 500's yield. The annualized dividend growth of the company was 4.17% over the past year. Check Kite Realty Group dividend history here>>>

Currently paying a dividend of $0.5 per share,

Portland General Electric (POR)

has a dividend yield of 4.22%. This is compared to the Utility - Electric Power industry's yield of 3.21% and the S&P 500's current yield. Annualized dividend growth for the company in the past year was 5.26%. Check Portland General Electric dividend history here>>>

But aren't stocks generally more risky than bonds?

It is true that stocks, as an asset class, carry more risk than bonds, but high-quality dividend stocks not only have the ability to produce income growth over time but more importantly, can also reduce your overall portfolio volatility relative to the broader stock market.

An advantage of owning dividend stocks for your retirement nest egg is that numerous companies, particularly blue chip stocks, raise their dividends over time, helping alleviate the impact of inflation on your potential retirement income.

Thinking about dividend-focused mutual funds or ETFs? Watch out for fees.

If you're thinking, "I want to invest in a dividend-focused ETF or mutual fund," make sure to do your homework. It's important to know that some mutual funds and specialized ETFs charge high fees, which may diminish your dividend gains or income and thwart the overall objective of this investment strategy. If you do want to invest in fund, research well to identify the best-quality dividend funds with the least charges.

Bottom Line

Seeking steady, consistent income through dividends can be a smart option for financial security in retirement, whether you invest in mutual funds, ETFs, or in dividend-paying stocks.

Zacks Investment Research

Kite Realty Group (KRG) reported $207.25 million in revenue for the quarter ended September 2024, representing a year-over-year increase of 0%. EPS of $0.51 for the same period compares to $0.01 a year ago.

The reported revenue compares to the Zacks Consensus Estimate of $210.39 million, representing a surprise of -1.49%. The company has not delivered EPS surprise, with the consensus EPS estimate being $0.51.

While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.

As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.

Here is how Kite Realty Group performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

• Revenue- Rental income: $204.93 million versus $207.57 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +0.5% change.
• Revenue- Minimum rent: $151.40 million compared to the $162.84 million average estimate based on two analysts.
• Revenue- Tenant recoveries: $40.69 million versus the two-analyst average estimate of $43.42 million.
• Revenue- Fee income: $0.46 million compared to the $1.11 million average estimate based on two analysts. The reported number represents a change of -57% year over year.
• Net Earnings Per Share (Diluted): $0.08 compared to the $0.07 average estimate based on three analysts.

View all Key Company Metrics for Kite Realty Group here>>>

Shares of Kite Realty Group have returned -2% over the past month versus the Zacks S&P 500 composite's +1.8% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term.

Zacks Investment Research

Kite Realty Group (KRG) came out with quarterly funds from operations (FFO) of $0.51 per share, in line with the Zacks Consensus Estimate. This compares to FFO of $0.51 per share a year ago. These figures are adjusted for non-recurring items.

A quarter ago, it was expected that this real estate investment trust would post FFO of $0.51 per share when it actually produced FFO of $0.53, delivering a surprise of 3.92%.

Over the last four quarters, the company has surpassed consensus FFO estimates two times.

Kite Realty Group, which belongs to the Zacks REIT and Equity Trust - Retail industry, posted revenues of $207.25 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 1.49%. This compares to year-ago revenues of $207.22 million. The company has topped consensus revenue estimates just once over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future FFO expectations will mostly depend on management's commentary on the earnings call.

Kite Realty Group shares have added about 12.6% since the beginning of the year versus the S&P 500's gain of 22.3%.

What's Next for Kite Realty Group?

While Kite Realty Group has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's FFO outlook. Not only does this include current consensus FFO expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Kite Realty Group: favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus FFO estimate is $0.52 on $210.95 million in revenues for the coming quarter and $2.06 on $842.03 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, REIT and Equity Trust - Retail is currently in the top 16% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Realty Income Corp. (O), another stock in the same industry, has yet to report results for the quarter ended September 2024. The results are expected to be released on November 4.

This real estate investment trust is expected to post quarterly earnings of $1.05 per share in its upcoming report, which represents a year-over-year change of +2.9%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Realty Income Corp.'s revenues are expected to be $1.34 billion, up 29.3% from the year-ago quarter.

Zacks Investment Research