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3 property stocks that yield over 5%: GPT Group, DEXUS Property Group and Mirvac Group

With Aussie interest rates set to stay low for a good while yet, income stocks could prove to be in-demand over the medium term. Of course, that’s not to say that growth isn’t important, but rather there could be improved sentiment in high-yielding shares moving forward. This could be hugely beneficial to holders of those shares, who may benefit from a high yield and strong capital gains in the share price.

With this in mind, here are three property stocks that yield over 5% and trade on attractive valuations.

GPT Group

2014 has been a great year for investors in GPT Group (ASX: GPT), with shares in the property trust rising by 16% year-to-date. However, there could be more to come, with the company’s shares still yielding an impressive 5.3% (unfranked) that could push the price even higher.

Furthermore, GPT is set to increase dividends per share at a solid pace over the next year, with dividends due to be 7.8% higher in 2015 than they were in 2013. This shows that GPT is delivering real term increases in dividends, too. With shares in the trust trading on a P/E ratio of 13.9 (versus 15.8 for the ASX), they also seem to offer good value.

DEXUS Property Group

As with GPT, 2014 has been a pleasing year for investors in DEXUS Property Group (ASX: DXS), with its shares recording a rise of 15% since the turn of the year. Despite this, they still offer a very healthy yield of 5.6% (unfranked) as well as a strong dividend growth rate.

Indeed, dividends per share are expected to rise at an annualised rate of 6.8% over the next two years, which means the stock could be yielding 6.1% in 2016. Trading on a P/E ratio of 14.5, Dexus seems to offer scope for an upward rating revision, too.

Mirvac Group

Meanwhile, Mirvac Group (ASX: MGR) has seen its share price grow by 5% during the course of 2014. As with its two property peers, it offers a healthy yield and good relative value.

For example, Mirvac currently yields an unfranked 5.1% and trades on a P/E ratio of 14.9. Furthermore, dividends per share are expected to be 4.4% higher in FY 2016 than they were in FY 2014, which means that shares in the REIT could be yielding as much as 5.3% in two years’ time. With recent results showing an increase in operating profit of 15.9%, Mirvac could prove to be a strong income play moving forward.

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*Extreme Opportunities returns as of June 5th 2020

Motley Fool contributor Peter Stephens does not own shares in any of the companies mentioned

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