With cash flow growth slowing, these three REITs have a high risk of cutting their dividends in the near future. Dump these stocks now before they cut their dividend and their stock prices plummet.

The recent market correction has all of us questioning our stock picks. The REIT sector has been hit especially hard, and since values peaked in January of this year many of us are sitting underwater on REIT holdings that were purchased in the second half of 2014 or first half of this year. With continued volatility expected in what may turn out to be a mostly sideways market for quite a while, you can improve your portfolio results by weeding out those REITs that do not bring any extra growth potential to the table.

A primary criteria for a REIT that I will recommend is a history of dividend growth. I then analyze the company to make sure that the payout growth rate can continue at a similar pace or even accelerate. In all market conditions, but especially in times like these, a growing dividend provides two important benefits. First, there is the obvious result of a growing cash flow stream. I like to view my REITs as investments that give me a raise at least once a year. A second benefit is that a growing dividend should eventually drag the share price higher. It’s a basic math if a REIT that yields 6% increases the dividend by 10%, the share price must go up by the same 10% to keep the yield at the same level. The result is a 10% share price gain plus the 6% yield for a 16% total return. In the short to intermediate term the market ignores this basic, math based fact, but in the longer term a rising dividend will propel a share price higher.

So the REITs to sell or avoid in the current market are the ones that are not increasing dividends or have slowing cash flow growth rates. These are the companies that are most likely to be forced into dividend reductions if the economy gets worse or higher interest rates actually happen. Here are three that you will want to re-evaluate if they reside in your portfolio.

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