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10 Real Estate Dividend Stocks to Buy in August 2021

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·10 min read
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In this article, we will be looking at 10 real estate dividend stocks to buy in August 2021. You can skip our detailed analysis of the real estate industry, and go directly to the 5 Real Estate Dividend Stocks to Buy in August 2021.

While the industry outlook for real estate and REITs in 2021 may seem bleak to some, and uncertain to others, the rising vaccination rates and economic recovery can testify to the claim that all hope may not be lost just yet for real estate investors. For instance, while vacancy rates for industrial centers and retailers rose to about 5.7% and 5% respectively in the third quarter of 2020, other property sectors that were more suited to the online sphere ended up benefitting and growing. One such example is data centers, for instance, housing Internet website hosting servers and providing related services. Additionally, REITs themselves have proven to be strong in the face of the pandemic and the economic crisis triggered by it. For example, REITs managed to raise about $469 billion in common equity capital from 2009 to 2020, and also maintained high liquidity levels during the pandemic.

Moreover, despite initial setbacks like disruptions in the cash flows of tenants resulting in rent avoidance and non-payment, REITs still managed to bounce back by about the third quarter of 2020. So while REIT earnings, measured by funds from operations, dropped by about 23.5% in Q2 last year, the situation was steadily managed and improved by the next quarter. Earnings measured by FFO thus rose by as much as roughly 5.6% in the third quarter of 2020, with the same sectors that were among the most affected by the pandemic, leading the recovery. These included the lodging/resorts, retail, and diversified REITs sectors. Finally, the stock market performance of REITs has also managed to bounce back from the -37.6% as of March 23rd, 2020, by bringing in a return of 50% as of November 30th, 2020. As such, it can be safely claimed that real estate and REITs may well be out of the worst of the pandemic by now.

Perhaps one of the biggest testaments to the above claim is the performance of some well-known REIT stocks, like Simon Property Group, Inc. (NYSE: SPG). Having beat second-quarter 2021 FFO estimates by bringing in $2.92 in FFO, alongside a $1.25 billion revenue, again beating consensus estimates, Simon Property Group, Inc. (NYSE: SPG) has managed to showcase the growing resilience of REIT stocks in the midst of the COVID-19 pandemic. Not only this, but the company has managed to raise its 2021 FFO per share outlook alongside hiking its quarterly dividend, further showcasing its own financial strength. Hence, REIT dividend stocks can safely be considered to be becoming investor favorites, much like other dividend stocks like Altria Group, Inc. (NYSE: MO), Verizon Communications, Inc. (NYSE: VZ), and McDonald's Corporation (NYSE: MCD).

Dividend investing is becoming difficult by the day, even for the smart money. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

10 Real Estate Dividend Stocks to Buy in August 2021
10 Real Estate Dividend Stocks to Buy in August 2021

Photo by Breno Assis on Unsplash

Let's now look at the 10 real estate dividend stocks to buy in August 2021.

The stocks added to our list below were selected on the basis of hedge fund sentiment discerned by analyzing Insider Monkey's data of 866 hedge funds. We have ranked the stocks from lowest to the highest number of hedge fund holders, and have also mentioned their dividend yields. Finally, we made sure to include stocks with mostly positive analysts' ratings and strong fundaments showcasing business strengths.

Real Estate Dividend Stocks to Buy in August 2021

10. Healthcare Realty Trust Incorporated (NYSE: HR)

Number of Hedge Fund Holders: 20 Dividend Yield: 3.8%

Healthcare Realty Trust Incorporated (NYSE: HR), a real estate investment trust based in Nashville, Tennessee, ranks 10th on our list of real estate dividend stocks to buy in August 2021. The company specializes in the ownership, management, acquisition, and development of outpatient medical facilities in the US.

Vikram Malhotra, an analyst at Morgan Stanley, raised his price target on Healthcare Realty Trust Incorporated (NYSE: HR) shares this March from $30 to $31. Malhotra also holds an Equal Weight rating on the stock.

In the second quarter of 2021, Healthcare Realty Trust Incorporated (NYSE: HR) had an FFO of $0.43, in line with estimates. The company’s revenue was $131.42 million, up 6.25% year over year and beating the previous quarter's revenue of $130.34 million. Healthcare Realty Trust Incorporated (NYSE: HR) has also gained 1.27% in the past 6 months and 8.68% year to date.

By the end of the first quarter of 2021, 20 hedge funds out of the 866 tracked by Insider Monkey held stakes in Healthcare Realty Trust Incorporated (NYSE: HR) worth roughly $172 million. This is compared to 23 hedge funds in the previous quarter with a total stake value of approximately $172 million.

Like Simon Property Group, Inc. (NYSE: SPG), Altria Group, Inc. (NYSE: MO), Verizon Communications, Inc. (NYSE: VZ), and McDonald's Corporation (NYSE: MCD), Healthcare Realty Trust Incorporated (NYSE: HR) is a good stock to invest in.

9. Welltower Inc. (NYSE: WELL)

Number of Hedge Fund Holders: 21 Dividend Yield: 2.8%

Welltower Inc. (NYSE: WELL) is a provider of healthcare infrastructure for the facilitation of better and cheaper treatment for patients. The company has a relationship-based investing platform and ranks 9th on our list of real estate dividend stocks to buy in August 2021.

This August, Berenberg's Connor Siversky upgraded shares of Welltower Inc. (NYSE: WELL) from Hold to Buy. Siversky also placed a $100 price target on the stock.

In the second quarter of 2021, Welltower Inc. (NYSE: WELL) had an FFO of $0.79, beating estimates by $0.02. The company’s revenue was $1.14 billion, also beating estimates by $28.36 million. Welltower Inc. (NYSE: WELL) has gained 62.84% in the past year.

By the end of the first quarter of 2021, 21 hedge funds out of the 866 tracked by Insider Monkey held stakes in Welltower Inc. (NYSE: WELL) worth roughly $326 million. This is compared to 26 hedge funds in the previous quarter with a total stake value of approximately $538 million.

Like Simon Property Group, Inc. (NYSE: SPG), Altria Group, Inc. (NYSE: MO), Verizon Communications, Inc. (NYSE: VZ), and McDonald's Corporation (NYSE: MCD), Welltower Inc. (NYSE: WELL) is a good stock to invest in.

8. SL Green Realty Corp. (NYSE: SLG)

Number of Hedge Fund Holders: 21 Dividend Yield: 5%

SL Green Realty Corp. (NYSE: SLG) specializes in investing in office buildings and shopping centers in the real estate investment trust industry. The company mainly operates in New York and ranks 8th on our list of real estate dividend stocks to buy in August 2021.

In June, Deutsche Bank's Derek Johnston raised his price target on SL Green Realty Corp. (NYSE: SLG) shares from $66 to $77. Johnston also reiterated his Hold rating on the stock.

In the second quarter of 2021, SL Green Realty Corp. (NYSE: SLG) had an FFO of $1.60, missing estimates by $0.02. The company’s revenue was $184.61 million, beating estimates by $2.09 million. SL Green Realty Corp. (NYSE: SLG) has also gained 12.55% in the past 6 months and 21.71% year to date.

By the end of the first quarter of 2021, 21 hedge funds out of the 866 tracked by Insider Monkey held stakes in SL Green Realty Corp. (NYSE: SLG) worth roughly $162 million. This is compared to 22 hedge funds in the previous quarter with a total stake value of approximately $214 million.

Like Simon Property Group, Inc. (NYSE: SPG), Altria Group, Inc. (NYSE: MO), Verizon Communications, Inc. (NYSE: VZ), and McDonald's Corporation (NYSE: MCD), SL Green Realty Corp. (NYSE: SLG) is a good stock to invest in.

7. Sabra Health Care REIT, Inc. (NASDAQ: SBRA)

Number of Hedge Fund Holders: 21 Dividend Yield: 6.5%

Sabra Health Care REIT, Inc. (NASDAQ: SBRA) is a REIT based in California and ranks 7th on our list of real estate dividend stocks to buy in August 2021. The company has a diverse portfolio and operates as a leader in the healthcare REIT sector.

Mizuho's Haendel St. Juste recently took over coverage of shares of Sabra Health Care REIT, Inc. (NASDAQ: SBRA) this July. The analyst holds a Neutral rating on the stock with an $18 price target placed on Sabra Health Care REIT, Inc. (NASDAQ: SBRA) shares as well.

In the first quarter of 2021, Sabra Health Care REIT, Inc. (NASDAQ: SBRA) had an FFO of $0.16, missing estimates by $0.01. The company’s revenue was $152.37 million, up 2.02% year over year and beating estimates by $1.94 million. Sabra Health Care REIT, Inc. (NASDAQ: SBRA) has also gained 2.38% year to date and 17.68% in the past year.

By the end of the first quarter of 2021, 21 hedge funds out of the 866 tracked by Insider Monkey held stakes in Sabra Health Care REIT, Inc. (NASDAQ: SBRA) worth roughly $112 million. This is compared to 20 hedge funds in the previous quarter with a total stake value of approximately $105 million.

Like Simon Property Group, Inc. (NYSE: SPG), Altria Group, Inc. (NYSE: MO), Verizon Communications, Inc. (NYSE: VZ), and McDonald's Corporation (NYSE: MCD), Sabra Health Care REIT, Inc. (NASDAQ: SBRA) is a good stock to invest in.

6. Arbor Realty Trust, Inc. (NYSE: ABR)

Number of Hedge Fund Holders: 21 Dividend Yield: 7.7%

Arbor Realty Trust, Inc. (NYSE: ABR) is a REIT whose subsidiaries include Arbor Realty Partnership among others, and it ranks 6th on our list of real estate dividend stocks to buy in August 2021. The company operates in the multifamily and commercial real estate areas.

JPMorgan's Charles Arestia has an Overweight rating on Arbor Realty Trust, Inc. (NYSE: ABR) alongside a price target of $18.

In the second quarter of 2021, Arbor Realty Trust, Inc. (NYSE: ABR) had an FFO of $0.51, beating estimates by $0.07. The company’s revenue was $58.77 million, up 40.67% year over year and also beating estimates by $4.5 million. Arbor Realty Trust, Inc. (NYSE: ABR) has also gained 18.38% in the past 6 months and 32.34% year to date.

By the end of the first quarter of 2021, 21 hedge funds out of the 866 tracked by Insider Monkey held stakes in Arbor Realty Trust, Inc. (NYSE: ABR) worth roughly $103 million. This is compared to 14 hedge funds in the previous quarter with a total stake value of approximately $68.4 million.

Like Simon Property Group, Inc. (NYSE: SPG), Altria Group, Inc. (NYSE: MO), Verizon Communications, Inc. (NYSE: VZ), and McDonald's Corporation (NYSE: MCD), Arbor Realty Trust, Inc. (NYSE: ABR) is a good stock to invest in.

Click to continue reading and see the 5 Real Estate Dividend Stocks to Buy in August 2021.

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Disclosure: None. 10 Real Estate Dividend Stocks to Buy in August 2021 is originally published on Insider Monkey.