Four High-Yield REITs Making Recent Large Gains
One of the most difficult decisions investors make when purchasing stocks is not just what to buy but also when to buy them. Too many investors chase stocks after a considerable price run, only to be disappointed when the stocks pull back, leaving them with significant losses to overcome.
But sometimes stocks pull back so much off highs that they become "oversold," meaning they've fallen to an extreme position that generates buying interest by those looking for a bargain. The stock then bounces much higher. Of course, the opposite is also true — when stocks are overbought, there's nobody left to buy, investors take profits and the stock sells off.
Recently, several real estate investment trusts (REITs) with generous dividend yields have had oversold bounces, sometimes without any significant news to act as a catalyst. Take a look at four of them.
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Peakstone Realty Trust (NYSE:PKST) is an El Segundo, California-based, internally managed diversified REIT that owns and operates single-tenant office and industrial properties. Peakstone calls itself America's Blue-Chip Landlord and has a portfolio of 71 properties with 17.9 million square feet of space across 24 states in high-growth markets. Its portfolio is 96% leased.
Since its initial public offering (IPO) at $8 in April 2023, Peakstone has been one of the most volatile stocks in the REIT sector. From an April high of $45.88, it fell to a May low of $14.78, then staged a run-up to $38.68 in June, followed by a long descent through the summer to bottom at $12.15 in October. From there, it rebounded to $21.73 near the end of 2023 before pulling back to $13.22 near the end of February.
But since the beginning of March, Peakstone is back on the upswing with a total return of 14.38%.
Peakstone pays a quarterly dividend of $0.225, which yields 5.71% annually. Investors may want to wait for a pullback from the over-extended price before taking a position.
One Liberty Properties Inc. (NYSE:OLP) is a Great Neck, New York-based diversified net lease REIT that owns and manages retail, office and industrial properties under long-term triple net leases. One Liberty Properties presently owns 109 properties with more than 10.8 million square feet over 31 states. Most of its properties are in the East and Midwest portions of the U.S. It was incorporated in 1982.
One Liberty Properties had a tremendous November, gaining 11.03%, followed by a long, slow pullback through December and January. After a sideways move in February, One Liberty Properties has now gained 10.28% since March began.
On March 5, One Liberty Properties reported funds from operations (FFO) of $0.45 per share, in line with estimates. Revenue of $22.74 million beat the consensus estimate of $22.45 million but was a 17.95% decrease from revenue of $27.71 million in the fourth quarter of 2022.
On March 8, B. Riley Securities analyst Craig Kucera maintained One Liberty Properties at Neutral and raised the price target from $22.50 to $24.
One Liberty Properties pays a $0.45 quarterly dividend, and the annualized $1.80 dividend yields 8.06%.
Generation Income Properties Inc. (NASDAQ:GIPR) is a Tampa, Florida-based diversified REIT that owns 26 single-property retail, office and industrial net lease properties in densely populated areas. Seventy-two percent of its tenants are investment grade credit or equivalent. Generation Income is a small company that was founded in 2015 and went public in 2021.
Generation Income Properties fell from $4.39 in January to a low of $2.90 on Feb. 23. The stock was quite oversold with a 14-period relative strength index (RSI) of 20 and a stochastic of 6. Since then, it's rebounded 27% to a recent price of $3.69.
Generation Income pays a monthly dividend of $0.039, and the annual dividend of $0.468 presently yields 12.89%.
Outfront Media Inc. (NYSE:OUT) is a New York-based specialized REIT with 500,000 advertising displays across the largest U.S. markets, using billboard, digital, transit and mobile assets to showcase its clients. Outfront Media's website claims that its media reaches 70% of all Americans weekly. Outfront Media and Lamar Advertising Co. (NYSE:LAMR), are the only specialty REITs that exclusively own advertising space.
Since touching a 2023 low of $7.818 in October, Outfront Media has been on a tear. By mid-January, it was trading at $14.25, at which point it pulled back to $12.01 on Feb. 20.
But on Feb. 21, Outfront Media reported its fourth-quarter operating results. Adjusted funds from operations (AFFO) of $0.40 beat the estimate of $0.36 and revenue of $501.2 million beat the estimate of $495.89 million and topped the fourth-quarter 2022 revenue of $494.7 million.
As a result of this solid report, Outfront has rocketed 30.4% higher to a recent price of $15.67.
Despite the huge move higher, Outfront's $0.30 quarterly dividend still yields 8.19% on an annualized basis.
If there's one takeaway from looking at these four REITs, it's that after long pullbacks, when volatile stocks reach a heavily oversold position, some great returns can be realized if investors are willing to assume a little bit of risk and have the patience to wait for a reversal.
Weekly REIT Report: REITs are one of the most misunderstood investment options, making it difficult for investors to spot incredible opportunities until it's too late. Benzinga's in-house real estate research team has been working hard to identify the greatest opportunities in today's market, which you can gain access to for free by signing up for the Weekly REIT Report.
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