Time to Buy into the Strong Momentum of These REITs?
There has been much anticipation regarding the quarterly reports from Real Estate Investment Trusts (REITs) after many of these stocks were trampled earlier in the year following the collapse of Silicon Valley Bank.
Banking fears and inflationary risks spilled over to the broader financial sector making many REIT stocks attractive near their 52-week lows for income-seeking investors.
This along with exposure and diversification to various real estate assets has quite a few REITs worthy of consideration at the moment and here are a few to consider.
AGNC Investment (AGNC)
Standing out with a Zacks Rank #1 (Strong Buy) is AGNC Investment whose stock has started to rebound in the last three months. AGNC was able to top earnings expectations on Monday with EPS at $0.67 (net spread and dollar roll income excluding premium amortization cost) compared to estimates of $0.58 a share.
Focused on residential mortgage-backed assets (RMBS) another highlight for AGNC was its 3.6% economic return on tangible common equity for the quarter climb swinging from a loss of -10% in Q2 2022.
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AGNC notably has an “A” Zacks Style Scores grade for Momentum and has maintained a very lucrative monthly dividend yield which is currently at 13.85%. This tops the Zacks REIT and Equity Trust Industry average of 11.25% and towers above the S&P 500’s 1.39% average.
Trading 18% from its 52-week highs, AGNC stock is up +10% since May and has risen +15% when including dividends. CEO Peter Federico remains optimistic going forward stating the company is at the forefront of one of the most constructive investment environments in its 15-year history, driven by historically attractive asset valuations, strong funding markets, and gradually improving hedging conditions as the Fed’s tightening campaign concludes.
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Blackstone Mortgage Trust (BXMT) Focusing on loans and securities backed by commercial real estate assets, Blackstone Mortgage stock sports a Zacks Rank #2 (Buy) and beat Q2 earnings expectations by 14% on Wednesday causing shares to spike +5%.
Second-quarter earnings of $0.79 per share also climbed 18% YoY adding fuel to the notion that Blackstone Mortgage Stock was oversold earlier in the year.
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Trading at $23 a share, Blackstone Mortgage stock is still 25% from its 52-week highs but has climbed +31% since May and +46% when including dividends (Total Return). Notably, Blackstone Mortgage stock also lands an “A” Style Scores grade for Momentum with CEO Katie Keenan stating the company sits on record liquidity and a well-structured balance sheet to navigate the period ahead.
Blackstone Mortgage’s 11% dividend yield (quarterly) remains intriguing for investors hoping shares of BXMT can continue their accession as this yield is on par with the industry average and well above the benchmark.
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Other REITs to Watch Ahead of Earnings
With their Q2 reports behind us, the momentum in AGNC and Blackstone Mortgage stock is hard to overlook at the moment.
It’s noteworthy that Arbor Realty Trust (ABR) and Apollo Commercial Real Estate (ARI) are two top-rated REITs that investors may want to watch ahead of their quarterly reports on July 28 and 31 respectively.
Arbor Realty shares have climbed +50% (+68% total return) over the last three months with Apollo’s stock up +17% (+22% Total Return). Both sport a Zacks Rank #2 (Buy), an "A" Style Scores grade for Momentum, and have dividend yields over 10%.
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AGNC Investment Corp. (AGNC) : Free Stock Analysis Report
Blackstone Mortgage Trust, Inc. (BXMT) : Free Stock Analysis Report
Arbor Realty Trust (ABR) : Free Stock Analysis Report
Apollo Commercial Real Estate Finance (ARI) : Free Stock Analysis Report
