The Easy Way to Become a Landlord
(1:00) - Should You Be Investing Into Real Estate Through A REIT?
(5:15) - Tracey’s Top Stock Picks: How To Find The Strongest REITs
(24:45) - Episode Roundup: EQIX, PSA, SPG, PK, ABNB, PLYA
Podcast@Zacks.com
Welcome to Episode #344 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
Are you feeling like you missed out on the real estate boom during the last few years? Are you still hoping to become a landlord and own your own piece of the American Dream?
There’s a way to do it without even having that much cash. You can buy a REIT.
What’s a REIT? It’s a real estate investment trust.
A REIT is a company that owns real estate. You can buy a REIT that covers just about any type of real estate including apartments, data centers, cell towers, shopping malls, hotels and resorts, cannabis facilities, self-storage, laboratories, offices, warehouses and medical facilities.
90% of the income the REIT makes must be paid out to shareholders each year.
4 REITs and One Stock to Get Real Estate Exposure
1. Equinix, Inc. (EQIX)
Equinix has a $70 billion market cap and calls itself the “world’s digital infrastructure company.” It specializes in data centers. In the second quarter, Equinix’s revenue was up 11% on strong demand due to AI. Equinix has 53 major projects underway across 40 metros in 24 countries.
Shares of Equinix are up 11.7% year-to-date. It trades with a forward P/E of 23.7 but has a PEG of just 1.6.
Equinix pays a dividend yielding 1.8%.
Should investors interested in data centers have Equinix on their short list?
2. Public Storage (PSA)
Public Storage is a $48 billion market cap self-storage REIT. Public Storage recently spent $2.2 billion to acquire Simply Self Storage which has 127 properties in 18 states. 65% of them are in the high growth sunbelt.
Shares of Public Storage are down 6.1% year-to-date. It’s cheap, with a forward P/E of 16.
Public Storage pays a dividend of 4.5%.
Should you own a self-storage REIT like Public Storage?
3. Simon Property Group (SPG)
Simon Property Group is a $43 billion REIT which owns premier shopping experiences in North America, Europe and Asia. Shares of Simon Property Group rose off its pandemic lows but are down 4.9% this year.
Simon Property Group pays a high dividend currently yielding 6.7%.
Should investors be keeping a shopping mall REIT like Simon Property Group on their short list?
4. Park Hotels & Resorts (PK)
Park Hotels & Resorts is a REIT which owns 41 Hilton hotels. It has a market cap of $2.7 billion. Last quarter RevPar increased in urban hotels with the NY Hilton Midtown up 26% and Chicago and DC up 23%. Forward bookings continued to increase.
Shares of Park Hotels & Resorts are up just 1% year-to-date but they are cheap. It has a forward P/E of 6.5 and a PEG of 0.8.
Park Hotels & Resorts pays a dividend yielding 4.9%.
Should investors be considering owning hotels like Park Hotels & Resorts?
5. Playa Hotels & Resorts N.V. (PLYA)
Playa Hotels & Resorts is not a REIT. It’s a small cap company, with a market cap of $1.08 billion, which owns and operates 26 resorts under several brand names including Hyatt, Hilton, Jewel and Wyndham in Mexico, Jamaica and the Dominican Republic. Playa Hotels & Resorts has been a pandemic winner as consumers want to travel. In the second quarter of 2023, Jamaica had record second quarter occupancy.
Playa Hotels and Resorts doesn’t pay a dividend but it repurchased 3.7 million shares for $34.2 million in the second quarter.
Shares of Playa Hotels & Resorts are up 8.6% year-to-date. It’s still attractively priced, with a forward P/E of just 16.
Should investors skip the REITs and buy a stock like Playa Hotels & Resorts if they want to own hotels?
What Else Do You Need to Know About REITs?
Tune into this week’s podcast to find out.
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Public Storage (PSA) : Free Stock Analysis Report
Simon Property Group, Inc. (SPG) : Free Stock Analysis Report
Equinix, Inc. (EQIX) : Free Stock Analysis Report
Park Hotels & Resorts Inc. (PK) : Free Stock Analysis Report
Playa Hotels & Resorts N.V. (PLYA) : Free Stock Analysis Report
