Individual investors can purchase shares in real estate investment trusts (REITs), which get publicly traded businesses that generate revenue from assets. They make it simple for investors to invest in real estate firms that own, develop, and manage residential, commercial, and industrial properties.
REITs must pay at least 90% of their taxable income in dividends, among other conditions. Funds from operations (FFO), an industry-specific measure of earnings, is a REIT indicator. American Tower Corp. (AMT), Crown Castle International Corp. (CCI), and Prologis Inc. are some of the most well-known companies in the industry (PLD).
People have begun to move from their houses as the COVID-19 epidemic, which has wreaked havoc on the real estate industry. Despite the improved economy, the company’s recovery has been patchy. Returning employees, for example, are met with much higher rates for closely owned dwellings and commercial assets than they were when they departed.
In addition to this, they also have outperformed the broader market, as reflected by an exchange-traded fund (ETF) called the Real Estate Select Sector SPDR Fund (XLRE). Over the past 12 months, XLRE’s total return of 38.2 percent outperformed the benchmark Russell 1000 index, which returned 30.4 percent.
The figures in the tables below represent market performance as of November 24, 2021. The top three REITs with the best value, the fastest growth, and the momentum are listed below. Without further ado, let’s get into it!!
Best Value REITs
The REITs with the least 12-month tracking price-to-earnings (P/E) rate are listed below. A low P/E calculation shows that you are spending lower for every dollar of gain created since earnings can get distributed to investors in the rewards and repurchases.
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Annaly Capital Management Inc. (NLY)||8.43||12.2||4.3|
|AGNC Investment Corp. (AGNC)||16.02||8.4||6.0|
|SL Green Realty Corp. (SLG)||74.35||5.0||7.8|
- Annaly Capital Management Inc
Annaly Capital Management specializes in home loan instruments (MBS), residential and commercial real estate, and middle-market lending for agencies. On November 10, Annaly Capital Management announced quarterly dividends on its Series F, Series G, and Series I preferred stocks. Preferred stockholders on the books on December 1, 2021, will receive profits on December 31, 2021.
- AGNC Investment Corp.
AGNC Investment invests primarily in domestic home loan assets via secured loans (MBS). It provides profits via asset allocation. AGNC Investment recorded a 70.6 percent YOY fall in net earnings for the third quarter of 2021, on September 30, 2021, owing to less net interest margin. Concerns about the rate of interest viewpoints, according to the firm, hampered its profitability.
- SL Green Realty Corp
SL Green Realty is a New York-based commercial real estate investment firm.
REITs with the most momentum
The REITs with the highest total return over the last 12 months are listed here.
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Simon Property Group Inc. (SPG)||169.03||55.6||107.8|
|Jones Lang Lasalle Inc. (JLL)||260.86||13.2||91.8|
|Iron Mountain Inc. (IRM)||46.85||13.6||91.0|
|Real Estate Select Sector SPDR Fund (XLRE)||N/A||N/A||38.2|
- Simon Property Group Inc.
Simon Property Group is a real estate investment trust (REIT) that owns, develops, operates shopping malls, outlet complexes, community centers, and other similar buildings throughout North America, Europe, and Asia.
- Jones Lang Lasalle Inc.
Jones Lang LaSalle is a property investment and capital management corporation based in New York. Different businesses and large clients receive renter advocacy, property maintenance, renting, financing, and evaluation solutions.
- Iron Mountain Inc.
Iron Mountain is a storage and data management-focused real estate investment trust. The company’s properties provide records management, data management, and information destruction services. Net income climbed by 77 percent in the third quarter of 2021, which ended Sept. 30, while total sales increased by 9% year over year. The expansion got aided by strong demand for its digital and other product offerings.
Fastest Growing REITs
According to a growth model that weights companies’ most recent quarterly year-over-year (YOY) percentage revenue growth and quarterly YOY earnings-per-share (EPS) growth 50/50, these are the best REITs. A company’s success is dependent on both sales and earnings. As a result, judging businesses only on their growth metrics exposes them to accounting errors during the quarter (such as changes in tax law or restructuring charges) that may make one figure or the other unrepresentative of the company as a whole. Companies with a quarterly EPS or revenue growth rate of above 2,500 percent were considered outliers.
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth(%)|
|Regency Centers Corp. (REG)||73.86||12.7||885.7||26.5|
|Sun Communities Inc. (SUI)||196.34||22.8||141.0||71.3|
|Duke Realty Corp. (DRE)||59.13||22.5||584.2||7.0|
- Regency Centers Corp.
Regency Centers is a real estate company that runs successful neighborhood retail malls with a supermarket. On November 4th, Regency Centers announced its quarterly results of 2021, which ended on September 30. Profit after tax to ordinary stockholders climbed by more than nine times year over year as sales rose.
- Sun Communities Inc.
Sun Complexes is a company that owns and maintains manufactured housing communities, RV resorts, and marinas. Assets get owned by the corporation across the Midwest and Southeast of the United States, as well as in Canada. On Nov. 15, the business announced that it buys Park Holidays U.K. for £950 million ($1.3 billion). Park Holidays is a company that owns and runs 40 vacation villages around the United Kingdom. Sun Communities’ operations in the region will get expanded with the acquisition.
- Duke Realty Corp.
Duke Realty is a real estate company that owns, develops, and maintains logistics and industrial assets across the United States. Leasing, property management, building, and other associated services get also provided by the organization.
The Bottom Line
So far in 2021, real estate investment trusts (REITs) hasve performed admirably. Through the end of December, the real estate sector had a total return of around 30% (price plus dividends). Higher inflation is another tendency that favors REITs. Because of their potential to raise rents, real estate equities are a natural inflation hedge.
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