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4 REITs ETFs Pop on Strong Q1 Earnings

This article was originally published on ETFTrends.com.

Strong first quarter earnings results help bolster real estate investment trusts and related exchange traded funds on Friday.

Of the top performing ETFs on Friday, iShares Cohen & Steers Realty Majors (ICF) gained 2.3%, Schwab US REIT ETF (SCHH) rose 2.2%, SPDR Dow Jones REIT ETF (RWR) advanced 2.2% and First Trust S&P REIT Index Fund (FRI) increased 2.1%.

Strong corporate earnings has helped prop up the ailing sector. For example, Simon Property Group (SPG) revealed a $2.00 per diluted share over the first quarter as compared to $1.53 per diluted share in the prior year period and a year-over-year increase in quarterly common stock dividend of 11.4%. Simon Property Group shares jumped 3.9% on the results.

"We delivered strong results to start the year," David Simon, Chairman and Chief Executive Officer, said in a note. "Portfolio net operating income increased 4.8% over the prior year, driven by growth in operating income from our comparable properties and the accretive impact of our new developments, redevelopments, expansions and investments. Given our accomplishments this quarter and our current view for the remainder of 2018, today we are increasing our full-year 2018 guidance."

Related - US Home Prices Rise: Time to Invest in REITs?

Additionally, despite showing earnings that declined year-over-year, Ventas Inc (VTR) reported adjusted earnings of $1.03 per share, compared to expectations of $0.43 per share. VTR shares surged 8.2%.

Real Estate Investment Trust Segment Keeps Strengthenening

The real estate investment trust segment may also be strengthening as bargain hunters look at the cheap valuations in the sector. The REITs sector has lagged behind the S&P 500 by over 15 percentage points over the past 12 months and are now trading on average a 16.4% discount to the assets they own, one of the widest gaps that has ever occurred outside of a recession, Ken Brown reports for the Wall Street Journal.

“There’s a big pile of private capital that wants to own real estate and a big pile of real estate trading at a discount,” Jonathan Litt, the chief investment officer of Land & Buildings told the WSJ.

For more information on real estate investment trusts, visit our REITs category.