The stock market’s strong run over the past few years brought attention to high-flying growth stocks, usually from the technology sector, that were consistently outpacing the market. However, fresh volatility within the last few months has shifted the focus back towards other investment strategies, and now it might be time for investors to check out things like real estate investment trusts, or REITs.
REITs are companies that own, operate, or finance real estate properties that produce income, such as apartment complexes or retail locations. These companies are heavily regulated and must meet a number of qualifications to be classified as a REIT, but they do offer investors a few distinct advantages.
First of all, real estate can be a very profitable investment sector when certain economic conditions are present. What’s more, REITs must pay at least 90% of their taxable income in dividends to shareholders, so they are a great option for income investors looking for steady payouts.
Luckily for Zacks readers, the proven Zacks Rank—which emphasizes earnings estimates and estimate revisions—works with REITs just as it would with any other company. The strongest REITs are going to be those with improving outlooks and great Zacks Ranks.
With that said, check out the REITs that are model says are impressive options right now:
1. Americold Realty Trust (COLD)
Americold is a REIT focused on owning and operating temperature-controlled warehouses. It boasts the largest network of these sort of facilities in the world, making it a dominant force in global food distribution and retail industries.
COLD is sporting a Zacks Rank #2 (Buy), as well as a “B” grade for Value in our Style Scores system. The stock is trading at about 19x forward earnings, which is a slight premium to the average but within a reasonable range considering its industry dominance. Plus, Americold offers a dividend yield of 3.5% right now.
2. VICI Properties Inc. (VICI)
VICI Properties is primarily engaged in owning, acquiring, and developing gaming, hospitality and entertainment destinations. The company leases real property and develops golf courses. In fact, VICI operates notable golfing facilities in Nevada, Mississippi, and Indiana.
VICI is a Zacks Rank #1 (Strong Buy) with great growth prospects. The company's expected long-term annual EPS growth rate sits at 10%, and with this in mind, the stock looks especially cheap with a P/E of 14 and PEG of 1.4. Also, the golf course operator presents a dividend yield of 5.1%.
3. Urstadt Biddle Properties Inc. (UBA)
Urstadt Biddle is a self-administered REIT which focuses on owning, operating, and redeveloping retail shopping centers in the suburban areas surrounding New York City. UBA's properties are what some may call “strip malls,” although their locations demand a relatively high-end experience.
UBA is another Zacks Rank #1 (Strong Buy), and its long-term expected EPS growth rate of 8% is equally impressive. The stock is also a decent momentum play after surging more than 15% in the trailing 12 weeks, and the company offers a dividend yield of 4.8%.
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Urstadt Biddle Properties Inc. (UBA) : Free Stock Analysis Report
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