Under REIT rules, companies must pay at least 90% of annual rental earnings out in dividends. This still leaves payouts sensitive to profits performance, but it also provides a higher level of income visibility for investors than most other stocks.

What’s more, with diversified tenant bases and clients locked onto long-term contracts, these businesses enjoy relatively stable cash flows they can use to pay dividends.

So what are the hottest REITs to buy right now. In my opinion, three of the hottest to consider are:

• Schroder European Real Estate Investment Trust
• Alternative Income REIT
• Regional REIT (LSE:RGL)

Each of these property powerhouses offers a forward dividend yield of at least 10%. Want to know what makes them true dividend heroes?

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Euro giant

Schroder European Real Estate Investment Trust holds a top-class portfolio of properties in continental hotspots. We’re talking about highly desirable cities with strong economies and infrastructure. Think Paris, Berlin, and Hamburg, to name a few of its locations.

It’s a winning strategy that leads to reliable rent collection and strong occupancy (portfolio occupancy was 97%, latest financials show). The trust’s exposure to different sectors like logistics, office, retail, and data centres also gives it strength.

The forward dividend yield here is 8.1%. I think it’s a top trust to consider, even though adverse currency movements could take a bite out of earnings.

Another diversified REIT

Like the Schroder trust, Alternative Income REIT takes a diversified approach to the property market. If anything, things are even more wild and wonderful — they range from hospitals and petrol stations, through to hotels, gyms, and thermal power plants.

Its rent collection is even higher, at 100%. And its tenants are locked down on ultra-long contracts, providing protection from (if not totally eliminating) cyclical pressures on rent collection. The weighted average unexpired lease term for its 23 tenants sits at 17 years.

With more than 92% of rental income linked to inflation, too, Alternative Income is in great shape to grow shareholder payouts. For 2026, the dividend yield is a brilliant 8.5%.

Double-digit yield

At 10%, Regional REIT is today the highest-yielding property trust on the London stock market. It carries greater risk than the other contenders we’ve looked at, reflecting its narrow exposure to the UK and broader weakness in the office market in which it specialises.

This has caused its share price to slump over the past year (down 10%). But is the bad news now baked into the trust’s share price? I think it might be. As well as having that enormous yield, Regional REIT trades at a 51% discount to its net asset value (NAV).

To my mind, it’s a top recovery share to consider. The REIT retains a high-quality portfolio, and is selling non-core assets to boost occupancy and repair the balance sheet. As for dividends, this year’s predicted payout is covered more than twice over by expected earnings, providing a wide margin of error.

The post Dividend yields up to 10%! 3 top REITs to consider for passive income appeared first on The Motley Fool UK.

But is the Footsie’s crown beginning to slip? Data shows that smaller companies on the London stock market may be better options for large dividends today and in the future.

Could dividend hunters who focus on blue chips be missing out on potential riches elsewhere?

Leftfield dividend heroes

According to Octopus Investments

both the FTSE SmallCap (excluding investment trusts) and the FTSE 250 continue to offer a higher dividend yield than the FTSE 100, which has declined over recent years as large-cap companies looked to rebuild dividend cover after the Covid pandemic.

Octopus believes this represents an attractive investing opportunity for dividend lovers. According to their fund manager Chris McVey,

we believe it’s an anomaly that these companies are continuing to fly under the radar for traditional income investors. Investors should take advantage of this now as UK smaller-cap stocks can offer them a compelling opportunity in terms of both absolute and relative value, as well as income, benefitting from attractive and growing dividend streams.

Four top income shares

He’s not wrong. I myself have been building a shopping list of non-FTSE 100 shares to consider for a large and sustained passive income. It’s a collection that continues to grow.

Miner Central Asia Metals, green infrastructure stock Gore Street Energy Storage Fund, and bank Lion Finance have all caught my eye recently. Their dividend yields for 2026 are 7.4%, 8.3%, and 6% respectively.

The Schroder European Real Estate Investment Trust (LSE:SERE) sits at the top of my wishlist though. This stock lets out commercial real estate in Continental Europe and distributes the rents it receives in dividends.

Given its geographic footprint, there is foreign exchange risk for profits and dividends when the trust converts euros into pounds. Encouragingly, though, the company has a strong record of delivering juicy cash rewards despite this danger.

This reflects the long-term contracts Schroder has its broad range of tenants locked into. It’s also thanks to the company’s classification as a REIT — under sector rules, at least 90% of annual rental profits must be paid in dividends.

For 2026, the trust’s dividend yield is an enormous 8.2%.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Here’s what I’m doing now

I’m not saying that I plan to shun FTSE 100 shares when looking for dividends in future. I own a large selection of large-cap income heroes in my portfolio, and recently added more Aviva and HSBC shares for their passive income prospects.

However, it’s worth looking further afield for top income stocks as well, as you can see. Not doing so could cost investors a fortune in lost dividends.

The post Could prioritising FTSE 100 income stocks be costing you big money? appeared first on The Motley Fool UK.

That’s what it should deliver, if it can simply maintain its dividend levels of the past few years. And we’ll know on Friday (5 December) when the trust delivers full-year results.

It’s the kind of dividend return that could help build a Stocks and Shares ISA into a big contributor to our long-term retirement income, especially if the cash is reinvested.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

European business

The real estate investment trust (REIT) invests in leased office, retail, and other business properties across major European cities. That does expose it to some struggling economies. But against that, it helps reduce overall geographic risk. Unlike UK-based REITS, it’s not at the mercy of the Bank of England or the Chancellor of the Exchequer.

At the interim stage, Chair Sir Julian Berney said: “Despite the company’s fundamentals being solid, supported by strong asset management that has consistently enabled the provision of high stable income for shareholders, the company’s shares are continuing to trade at a persistent discount to NAV.”

With an estimated current net asset value per share of 99.8p, we’re looking at a 37% discount at the time of writing.

Yes, there’s both property risk and risk from European economic weakness. But the dividend yield and discount to NAV have to make it a serious long-term ISA consideration.

Sticking with Europe

TwentyFour Income Fund (LSE: TFIF) is a FTSE 250 investment company. And it invests mostly in asset-backed securities (ABS) in the UK and Europe. It is, though, expanding into Australia and the US too.

It goes for things like mortgages held by smaller financial institutions, credit card debt, and often things with a bit more risk in the pursuit of superior income returns.

The dividend yield has fallen a bit with the shares having risen nicely in the past couple of years.

But November’s first-half results included a 4p interim dividend and reiterated plans for 8p total for the year. So even after recent share price gains, that’s still a 7.1% yield.

Growth opportunities

The company also raised new funds for investment of £64.3m in the first half through a new equity offer.

We heard that: “Despite continued political and fiscal uncertainty, strong supply and demand for ABS remains. Proposed regulatory changes in Europe are likely to further underpin that demand from banks and insurance companies over the longer term.”

In this case, the shares trade at a slight premium to NAV of 1.9%. So that has to suggest some valuation risk.

And though the board is clearly optimistic about the ABS market, such assets do carry risk of defaults that traditional company stocks and corporate bonds don’t.

I definitely wouldn’t rate TwentyFour Income as ideal for risk-averse investors. But for those wanting to spice up their dividend stocks selection and who are well diversified, it has to be one to consider.

The post 2 champion high-yield (7%+) dividend stocks to consider for an ISA right now appeared first on The Motley Fool UK.

Euro star

The Schroder European Real Estate Investment Trust (LSE:SERE) lets out offices, retail spaces and other properties in major European cities. This doesn’t make it immune to risk — indeed, Germany’s struggling economy remains a threat. But its multi-country footprint helps reduce geographical risk over the long term.

In fact, this investment trust has proved extremely resilient despite recent economic pressures. Property occupancy was a robust 95% in the six months to March. And rent collection was 100%. This reflects in large part its focus on quality properties in economic hotspots such as Berlin, Paris and Hamburg.

This robustness is also thanks to its determination to capture locations with strong demographic, technological and infrastructure dynamics. It’s strategy of targeting what it calls ‘winning cities’ is also one I believe sets it up well for long-term earnings growth.

As I’ve explained, REITs like this aren’t without their risks. But sector rules mean they can still be an excellent source of dividend income over time.

These investment trusts don’t pay a penny in corporation tax. In exchange, they’re obligated to pay a minimum of 90% of annual rental earnings out in the form of dividends. It doesn’t guarantee a large and/or growing dividend year after year. But it prevents the company’s management from retaining too much income, making dividend growth more likely.

Today the Schroder European Real Estate Investment Trust carries a 7.6% forward dividend yield. That towers above the FTSE 100 average of 3.2%, to put that into perspective.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Green option

Renewable energy stocks are under growing threat from changing political thinking around climate change. In late August, Danish energy company Ørsted‘s shares slumped to all-time lows, for instance, after the White House halted work on a new US wind farm project.

Yet despite such dangers, I don’t think investors should consider avoiding the sector. There are still great opportunities out there, such as NextEnergy Solar Fund (LSE:NESF), which has roughly 100 solar projects on its books. By focusing on European countries like the UK, Italy, Spain and Portugal, it operates in regions where political attitudes towards green power are far more supportive.

In Britain, for instance, the government is looking to supercharge solar capacity from 18GW today, to at least 45-47GW by 2030. The UK is this trust’s core market, and home to roughly 85% of its total projects.

From an income perspective, I like the fact that NextEnergy operates in a highly defensive sector. Electricity demand remains broadly constant across the economic cycle. And so the trust has enjoyed the reliable cash flows to help it regularly raise annual dividends.

They’ve risen every year since NextEnergy was created in 2014. And payouts are tipped to grow again this year, resulting in an enormous 12% dividend yield. I think it’s another great long-term dividend option to consider.

The post 2 first-class REITs and investment trusts to consider for a long-term passive income! appeared first on The Motley Fool UK.

Investors can manage the danger they take on, however, by snapping up penny shares that command low valuations. This pricing cushion can offer protection from share price drops if the company’s growth plan doesn’t pan out as expected.

With this in mind, here are two top shares to consider this month.

Screen idol

The threat to cinema operators is severe as streaming companies like Netflix change the way we consume movies. Yet Everyman Media (LSE:EMAN) continues performing strongly, even as pressure on consumers’ spending power persists.

Everyman — which operates 48 theatres across the country — isn’t your bog-standard multiplex owner. It offers a well-rounded experience, showing niche, independent, and foreign films alongside the usual blockbusters. What’s more, patrons can grab a drink at its bars and go for a meal at its in-house restaurants, too, offering everything people need for a good night out.

This value-added strategy is paying off handsomely. In the 26 weeks to 3 July, group revenues leapt 21%, to £56.5m. Admissions increased 15% from the same 2024 period; ticket prices rose 6%; and food and beverage spend per head was up 5.9%.

Consequently, group EBITDA shot 33% higher over the period, to £8.2m.

Everyman is confident its ‘whole experience’ model will continue delivering the goods, and is eyeing further expansion to its estate — it “plans to open two additional venues in 2026“, it’s said, and enjoys “a strong pipeline of future developments” too.

Naturally, the ongoing streaming revolution will remain a threat to businesses like Everyman for the foreseeable future. But in the case of this penny stock, my view is the danger is more than baked into the cheapness of its shares.

The screen idol’s enterprise value (EV) to EBITDA (earnings before interest, tax, depreciation, and amortisation) ratio is just 2.8 times. Any reading below 10 suggests a share could be undervalued.

Property for pennies

The second top penny share to consider is Schroder European Real Estate Investment Trust (LSE:SERE). Unlike many small caps, it offers the possibility of a large passive income as well as growth, which reflects its classification as a REIT.

Under sector rules, at least 90% of rental-related profits must be paid out in dividends each year.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

That’s all well and good on paper. But with eurozone economies struggling for growth and inflationary pressures persisting, the trust’s returns could theoretically disappoint in the near term.

Such dangers wouldn’t necessarily put me off if I had cash to invest, however. Over the long term, the company — which owns retail, office, and industrial assets, among others — has the potential to deliver spectacular earnings growth. Its focus on ‘winning’ cities with strong economies, robust infrastructure, and attractive environments (like Paris and Berlin) gives it an edge achieving impressive rental income growth.

And, today, the trust offers excellent all-round value. It trades at an 31.8% discount to its net asset value (NAV) per share. As for those dividends, its forward yield is an enormous 7.6%.

The post 2 cheap penny stocks for savvy investors to consider in August appeared first on The Motley Fool UK.

Like any dividend share, the levels of income they pay are linked to the amount of earnings generated. However, REIT obligations state they must pay a minimum of 90% of annual profits in dividends in exchange for tax breaks. So investors often enjoy better income visibility with these assets.

Here are two top investment trusts that have grabbed my attention today. As well as offering that security, they also have the sort of dividend yields that suggest above-average passive income over the near term. So I feel they’re worth a closer look.

Dividends are never, ever guaranteed. But if broker forecasts prove accurate, a £15,000 lump sum investment spread across these stocks will deliver a £1,088 second income just for their current financial years.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Euro star

Though its 15 different assets, the Schroder European Real Estate Investment Trust invests in what it deems ‘winning cities’ across France, Germany and The Netherlands. These are locations that have significant scope for long-term growth.

While it’s focused on commercial assets, the trust spreads its exposure across multiple industries including retail and offices. This geographical and sector diversification helps it navigate weakness in particular areas and deliver a stable return over time:

Higher interest rates have been a problem across the REIT complex in recent years. And this Schroders trust could experience more stress than UK peers if the US and EU engage in a bloody tariff war.

However, lower inflation in the eurozone compared with Britain suggests the threat here could be less severe. Indeed, news last week that German consumer price inflation (CPI) fell to 2.1% in May — fractionally above the ECB’s target — is an encouraging sign.

At 66.8p per share, the Schroder European Real Estate Investment Trust trades at a 31.5% discount to its net asset value (NAV) per share. I think it demands serious attention at this price.

A ‘safe’ selection

To my mind, Primary Health Properties is one of the most secure passive income shares to consider today. It’s why I hold it in my Stocks and Shares ISA.

As the name implies, it focuses on the primary healthcare sector and operates 516 GP surgeries and other medical centres in the UK and Ireland. This isn’t just a rock-solid sector that’s immune to economic conditions, it’s one with substantial growth potential as governments act to divert patients from crammed hospitals to get treatment elsewhere.

Another reason I like Primary Health Properties is the majority (89%) of its rental income is bankrolled either directly or indirectly by government bodies. This provides earnings with another layer of security.

As I say, REITs like this are vulnerable to unfavourable interest rate rises. This particular one could also come under pressure if UK health policy changes.

But I hope these dangers are reflected in its low valuation. At 100p per share, the trust deals on a sub-1 price-to-book (P/B) ratio of 0.9.

The post 2 REITs to consider in June to target a £1,088 passive income! appeared first on The Motley Fool UK.

Small-cap shares often lack the financial strength of larger companies, and don’t enjoy the stable and/or diversified revenue streams of bigger firms. This can make them more sensitive to interest rate hikes, increasing inflation, and a slowdown in consumer and business spending.

What’s more, such companies are often dependent on outside funding to operate and grow. This can be seriously compromised when downturns prompt a tightening in credit conditions.

Having said that, I believe a large number of penny stocks are currently so cheap that they demand a close look. Here are two that I think offer stunning value today.

Michelmersh Brick

Building material suppliers like Michelmersh Brick (LSE:MBH) could stand to lose if trade tariffs drive inflation higher. The subsequent (likely) increase in interest rates could choke off the UK housing market’s recent recovery and endanger future build rates.

Yet I believe this threat could be baked into the small cap’s low valuation. It looks especially cheap relative to earnings forecasts, trading on an undemanding price-to-earnings (P/E) ratio of 10.5 times for 2025.

Meanwhile, the company’s corresponding price-to-earnings growth (PEG) ratio is just 0.6, some distance below the value watermark of 1.

To provide an added sweetener, the brickmaker’s dividend yield for 2025 is 4.8%. To put it in context, that’s comfortably above the FTSE 100 average of 3.6%.

Encouragingly, Michelmersh also has a strong balance sheet (net cash: £6m) that can help it ride out any temporary pressure in its end markets. Its decision to resume a £2m share buyback programme last month underlines the firm’s strong financial foundations.

Over the long term, I think this penny stock has considerable growth potential amid government plans to supercharge housebuilding rates. Up to 1.5m new homes could be built between 2024 and 2029 under the current strategy.

Schroder European Real Estate Investment Trust

Like Michelmersh, property stock Schroder European Real Estate Investment Trust (LSE:SERE) would also be impacted by a sudden inflationary spurt. Alongside depressing its net asset values (NAVs), a subsequent rise in interest rates could also jack up its borrowing costs, thus impacting its expansion plans.

However, the stunning all-around value it currently offers still makes it worth a close look.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Today the real estate investment trust (REIT) trades at a juicy 32.2% discount to its NAV per share. Its dividend yield is also more than double the FTSE average, at 7.6%.

By focusing on prime cities in Germany, France and The Netherlands, the Schroder European Real Estate Investment Trust provides significant earnings potential while facilitating strength through diversification. Its pan-sector exposure also gives it several major structural opportunities to exploit, including the e-commerce boom and the revival of office-based work.

According to REIT rules, it must pay a minimum of 90% of annual rental profits out in dividends. I’m optimistic this penny stock will remain a robust passive income share for the long term.

The post 2 mega-cheap penny stocks to consider in May appeared first on The Motley Fool UK.

As you’ll see, their forward dividend yields sail past the UK blue-chip average.

Foresight Environmental Infrastructure

Investing in utilities can be an effective strategy when broader economic times are challenging.

Sure, earnings can be impacted by higher interest rates. But on the whole, the essential commodities they provide to homes and businesses — whether that be water, gas, or electricity — can provide excellent profits stability.

This is an essential quality that gives utility companies financial means and the confidence to consistently pay a decent dividend.

Investors have a huge range of utilities shares and related investment vehicles to choose from today. One investment trust I like is Foresight Environmental Infrastructure (LSE:FGEN), whose forward dividend yield is a gigantic 10.9%.

This company has its finger in many pies when it comes to harnessing the growing green economy. It owns wind and solar farms, hydro plants, waste management sites, and biomass projects, to name just a handful of asset categories it’s involved with.

In total, it owns 41 projects spanning Europe. It’s a range that provides added protection for investors, as localised issues like adverse weather conditions and regulatory changes can be effectively absorbed, safeguarding earnings and dividends.

Renewable energy trusts like this also have considerable long-term growth potential as the world steadily switches away from fossil fuels. Dividends here have risen every year since it listed on the London stock market in 2014. It’s a run I expect to continue.

Schroder European Real Estate Investment Trust

Schroder European Real Estate Investment Trust (LSE:SERE) is another investment trust I think’s worthy of attention from dividend chasers. Its classification as a real estate investment trust (REIT) means at least 90% of annual rental earnings are guaranteed to be paid out to shareholders.

Furthermore, at 7.9%, its forward dividend yield is more than double the FTSE 100 average.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

As the name suggests, this trust focuses on Europe and holds a diversified portfolio of properties. These include food and DIY retailers, warehouses, logistics hubs, and office space. And they are based in so-called “winning cities” (including Paris, Berlin, and Hamburg) that have substantial long-term growth potential.

Theoretically, the trust’s focus on cyclical sectors could leave earnings more vulnerable to turbulence during economic downturns. However, with around 50 tenants, it effectively minimises rent collection and occupancy issues at the group level.

I also like Schroder European Real Estate Investment Trust because of its strong balance sheet. With a loan to value of just 25%, it has substantial flexibility to continue paying a large dividend even if profits disappoint in the near term.

The post 2 high-yield investment trusts to consider for a passive income appeared first on The Motley Fool UK.

According to the trading platform, investor confidence in North America has sunk 17% in March, as its customers “baulked at the impact that some of the new president’s policies appear to be having on markets“.

The company’s survey, on the other hand, showed confidence in the UK spiked 16% this month. The improvement in Europe was even greater, up 48%.

For Europe, Hargreaves said that “after some difficult months, [our] investors seem to have faith that the political situation is settling down“. It added that confidence in the UK economy has also surged in recent weeks.

It commented that “investors continue to favour global funds,” but added that its clients “are now starting to look at European and UK funds too“.

It’s important to say that confidence in Britain and Mainland Europe is rising from a low base. And what’s more, the US stock market still carries considerable opportunities for investors, which means interest is unlkely to fall off a cliff.

But for individuals looking to buy more local assets today, here are two top investment trusts I think are worth consideration.

1.Schroder European Real Estate Investment Trust

Years of underperformance means Schroder European Real Estate Investment Trust (LSE:SERE) trades at a 35.2% discount to its estimated net asset value (NAV) per share.

This could provide further scope for it to rise following recent gains. It was recently trading at at 67.8p per share.

Schroder’s trust owns assets in what it describes as “winning cities” like Paris and Berlin. We’re talking locations with good infrastructure, differentiated economies, wealthy populations and excellent retail and leisure facilities.

It’s an approach that — despite persistent interest rate risks — could deliver excellent long-term returns.

This investment trust may be an especially attractive pick for dividend investors. Under real estate investment trust (REIT) rules, it must pay at least 90% of yearly rental income out in the form of dividends.

For this financial year (to September) its dividend yield is a whopping 7.5%.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

2. Supermarket Income REIT

Supermarket Income REIT‘s (LSE:SUPR) another property trust trading extremely cheaply today. At 73.8p per share, it’s dealing at a 17% discount to its NAV per share. An 8.3% dividend yield provides further appeal for value investors.

As with other REITs, it’s vulnerable to a spike in interest rates. It also faces a more specific threat in the steady growth of online retail.

But on the whole, Supermarket REIT’s a rock-solid trust, in my eyes. Its focus on the highly stable food retail market provides excellent earnings and dividend visibility. It also lets its properties to industry heavyweights like Tesco and Sainsbury’s, further mitigating the threat of occupancy issues and missed rent collections.

I think it could be a great long-term investment as the UK’s increasing population drives food retail growth.

The post 2 investment trusts to consider as confidence in the UK and Europe surges appeared first on The Motley Fool UK.

Glistening gains

Lifted by a resurgent gold price, mining stocks across the London Stock Exchange have soared since 1 January. Serabi Gold (LSE:SRB), which is listed on the Alternative Investment Market (AIM), has seen its share price leap 21.8% up to yesterday (5 February).

Can this small-cap gold stock continue to rise though? I think there’s a good chance it can.

At 135p, Serabi shares still look dirt cheap. City analysts think the miner’s earnings will soar 65% year on year in 2025. This results in a price-to-earnings (P/E) ratio of just 2.9 times, leaving (in my view) plenty of scope for further gains.

There’s no guarantee that bullion prices — which have hit new record highs around $2,885 per ounce this week — will continue rising. A resurgent US dollar, for instance, could curb additional gains, making it more expensive to buy the yellow metal.

But on balance, I think gold could continue its bull run that began in October 2023, pulling gold stocks still higher. Fears over global ‘stagflation’ keep rising, driven by recent inflation readings and fresh trade wars. At the same time, worries over the geopolitical landscape and the possibility of fresh conflict are also ascending.

Serabi’s share price could also take off if production ramp-ups hit their target too. The company plans to raise annual output to 60,000 ounces by next year.

A penny stock pick

At 66.1p per share, the Schroder European Real Estate Investment Trust (LSE:SERE) has risen 5% in value in 2025.

It’s been a busy start to the year for the property stock. It announced plans to sell a food retail asset in Frankfurt, Germany, along with its 50% stake in a shopping centre venture in Seville, Spain.

Following the Frankfurt announcement in January, the trust also announced plans to repurchase 20,046,829 of its shares. It said that this reflects the trust’s “robust financial standing,” and the “attractive opportunity” that recent share price weakness provides.

Even after early 2025’s strong gains, Schroder European Real Estate Investment Trust’s share price still sits at a healthy 33.4% discount to its net asset value (NAV) per share. So it’s still an attractive asset for value investors to consider, in my view.

Unlike most penny stocks, the trust is (like similar financial vehicles) designed to provide a solid stream of passive income to its investors.

As a real estate investment trust (REIT) rules, it’s pays 90% of rental profits or more out in dividends. As a result, its dividend yield sits at 7.4%. To put that into context, the FTSE 100 index’s forward yield sits way back at 3.5%.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Given persistent inflationary pressures, there’s considerable interest rate risk facing the business. If the European Central Bank (ECB) fails to cut interest rates any further, NAVs will continue to face pressure.

Still, I think the size of the discount on the trust’s shares more than reflects future rate uncertainty. It could also lead to further share price gains if interest from bargain hunters heats up.

The post 2 flying small-cap stocks to consider for a winning shares portfolio! appeared first on The Motley Fool UK.