3 Low-Priced REITs With Massive Yields
Real estate investment trusts (REITs) are poised for a rebound as the Federal Reserve nears its policy tightening cycle and construction activity is expected to pick up with lower borrowing rates.
While the majority of REITs have delivered negative returns so far this year as the benchmark federal funds rate stands at a 22-year high, their discounted prices offer an ideal buying opportunity.
Historically, there’s been a notable resurgence in total returns following the conclusion of monetary policy tightening cycles. REIT total returns showcased impressive performance in the final quarter of 2023, coinciding with the Fed’s decision to maintain rates and signal a dovish stance for 2024.
Below are some popular low-priced REITs with impressive yields.
Creative Media & Community Trust
Creative Media & Community Trust Corp. (NASDAQ:CMCT) is a Maryland-based residential REIT specializing in multifamily properties and office spaces. Currently trading at $3.71, Creative Media boasts a dividend yield of 9.01%, making it an attractive investment option for value investors. The REIT currently pays $0.34 per share in dividends annually.
The rising demand for multifamily properties is expected to boost Creative Media & Community Trust's growth in the near term. In the third quarter of 2023, which ended Sept. 30, Creative Media & Community Trust's overall multifamily occupancy rate rose 20 basis points sequentially to 84.1%.
“We made additional strides improving multifamily occupancy,” Creative Media CEO David Thompson said in the company's latest earnings release. “Two of the three assets that we acquired this year are still in their lease-up phase following completion of construction. We believe the continued lease-up of these two assets will lead to improving funds from operations.”
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Uniti Group
Shares of fiber solutions and communications infrastructure developer Uniti Group Inc. (NASDAQ:UNIT) have risen more than 91% over the past year, making it one of the best-performing REITs over this period. The robust demand for fiber solutions in the telecom industry has fueled Uniti Group's growth despite the precarious macroeconomic backdrop, as the REIT's top line rose about 5% year over year in fiscal 2023.
Uniti Group pays $0.60 in dividends annually, yielding 9.57% on its current share price. The REIT's four-year average dividend yield stands at 7.98%.
"2023 was another productive year for Uniti. Our core recurring strategic fiber business continues to demonstrate its resiliency with top-line growth of 5% in 2023 when compared to 2022 and continued declining net success-based capital intensity," Uniti Group President and CEO Kenny Gunderman said in the company's last earnings release.
Apple Hospitality
Apple Hospitality REIT Inc. (NYSE:APLE) owns and operates 225 hotels across 38 states. It is one of the most popular hospitality REITs, with its portfolio comprising Marriott, Hilton and Hyatt-branded hotels.
The REIT pays $0.96 in dividends annually, yielding 5.81% on its current share price. Apple Hospitality's dividends are typically distributed monthly in 12 equal installments of $0.08 each, with the last payment disbursed on March 15.
The hospitality sector rebounded spectacularly last year as a result of the pent-up demand resulting from pandemic-era restrictions. Subsequently, Apple Hospitality's net income amounted to $20.77 million in fiscal 2023, marking a 798.1% rise year over year.
The REIT's growth momentum is expected to continue in 2024, as analysts expect Apple Hospitality's revenues to rise 6.2% year over year to $1.43 billion in fiscal 2024. The consensus earnings per share (EPS) estimate of $0.85 for the current year indicates a 10.4% increase from last year.
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This article 3 Low-Priced REITs With Massive Yields originally appeared on Benzinga.com
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