So what are the REIT stocks? Real Estate Investment Trust is the full form for REIT. Basically, there are certain premium real estate that are owned by companies. These companies are tasked with management, like leasing the property. So how does a person or a stockholder earn?
REIT in Detail: Intro
Well, the rent collected from leasing the buildings is divided among the shareholders. REIT can range anywhere from:
apartment complexeshospitalsdata centers toIT buildings
The prime factor making them a part of REIT is the high-price of the property. Generally saying, the market prices of some of the US apartment REITs seem to be implying a 20% plus correction in unit values from their peaks already. So the process is well underway, albeit the equity market ahead of the curve in pricing in what is to come. In the next few points, we are going to discuss the top REITs to invest in.
Top REITs to Research
Investopedia has come up with a list of top REIT of 2022. These publicly traded companies often have a variety of properties to invest in. Here, we have divided the REIT into 3 groups: the ones with the best value, the ones which have the fastest growth, and the ones with the greatest momentum.
REIT with Best Value
Following are the 3 companies with the best value. It is proven by the low P/E ratio, which basically means the ratio of sharing price to earning price. A higher P/E suggests that the company has been overvalued. However, a low P/E shows that one would have to pay less.
Annaly Capital Management Inc. (NLY)
With a public availability of 100 million shares, Annaly is one of the best value REITs. With gross proceeds of about $645 million, it is worth putting your funds in this one. They are involved in residential, commercial and middle-market granting.
New Residential Investment Corp. (NRZ)
The next top REIT in the list is New Residential Investment Corp. With a higher P/E ratio of 4.9 as compared to the Annaly, it is recommended if you are interested in residential complexes. The services include mortgage servicing, dealing with residential loans, and providing non-agency securities.
Apartment Income REIT Corp. (AIRC)
The last REIT for best value ones are Apartment Income REIT Corporation. It has the highest price, market cap, as well as, the P/E ratio among the 3 of them. It basically means that although the price is really high, the returns would be even more fruitful. In the District of Columbia, one can find 84 apartment communities.
REIT That Are Growing Fast
The next 3 companies fall under the fastest-growing category of REIT. The main factors affecting this category would be quarterly EPS and revenue growth. Both help to provide an authentic figure and decrease the chances of including anomalies.
Crown Castle International Corp. (CCI)
Leasing and managing communication infrastructure is the main task for Crown Castle. As the leasing market grew, so did Crown Castle. The EPS growth is 646.2% and revenue growth is 17.3%. This was a 7 times surge for Crown Castle.
Vornado Realty Trust (VNO)
If retail and office properties are your thing, Vornado is the one to trust. With over 26 million feet of property in major cities like New York, San Francisco, and Chicago, you would find a Vornado in almost every place. It has good investing properties with similar EPS and revenue growth, like Crown Castle. However, the price and market cap are significantly low.
Realty Income Corp. (O)
The final company for his list is Realty Income Corporation. They announced on May 17 their 623rd consecutive common stock dividend and were able to pay their shareholders the dividends by June 1st. Their main criteria are dependable dividends.
Greatest Momentum REIT
The last criteria with another list of 3 companies is those with the greatest momentum. Momentum in investment terms means total highest returns. It is usually calculated over a period of 12 months.
American Campus Communities Inc. (ACC)
With a 41.7% 12-month trailing total return, this is one of those companies that can provide the highest momentum. American Campus Communities is tasked with building and managing student housing properties. 2021 saw doubling of revenue growth.
Iron Mountain Inc. (IRM)
The next in line is Iron Mountain. It is involved with data center, data storage and retrieval properties. The whole IT and now, basically, almost all businesses are dependent on Iron Mountain to store and receive data as and when required. While the price and total 12-month return is lower than American Campus Communities, the market cap is slightly high. This means that you can rely on this company’s services.
Extra Space Storage Inc. (EXR)
Lastly, we have Extra Space Storage, that builds, develops, and manages self-storage properties. With a whopping 2100 properties all over the US, it is one of the biggest companies when it comes to self-storage bunkers and containers. As of May 26, they had a quarterly dividend of $1.50 per dividend and was fulfilled by June 15.
Final Thoughts
There you go, those are the top REITs that you can look forward to investing in. You would require some research before you invest, like knowing the type of REIT. For example, the property you are interested in is Equity type or Mortgage type. REITs have the advantage of liquidity, steady dividends, and several options of diversification. Unfortunately, if you are looking to save money by not paying tax or paying less tax, that would not be possible. Of course, just like other forms of investments, REIT is also subject to market risks. Having substantial capital at your disposition is important to be able to invest. For instance, insurance companies and bank trust departments are the ones that can easily buy these high-priced shares.
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