In this article, we will take a look at the 10 best REIT stocks to buy right now. You can skip our comprehensive analysis of these stocks and go directly to the 5 Best REIT Stocks to Buy Right Now.
The COVID-19 vaccinations have improved recovery prospects for industries that require in-person dealing, like resorts, restaurants, retail, skilled nursing and senior living. The housing sector is also booming, with home sales, prices, and construction all on the rebound trail after a torrid twelve months. A new government in the White House has already unveiled a trillion dollar infrastructure plan and released virus stimulus cheques for both business owners and job-goers. It would seem that the real estate sector is a direct beneficiary of all these growth catalysts.
However, the overall situation is still far from stable. New virus variants are wreaking havoc in densely populated countries that were previously shielded from the impact of the pandemic, like Brazil and India, and there is no historical precedent for the changes the pandemic seems to have ushered in, like the work-from-home culture and the widespread adoption of digital technology as the definitive means for both business and finance. However, even bearish market dynamics have provided the real estate sector with an opportunity for growth.
Recovery in REIT Stocks
The strength of the digital economy lies in data centers, communication towers, and industrial units. All these economic sectors are a central part of the real estate universe. For example, Equinix, Inc. (REIT) (NASDAQ: EQIX), a real estate investment trust that provides data center management to technology firms on five continents, has been involved in the development of a global hub for pandemic-related data gathering in Berlin. Equinix, Inc. (NASDAQ: EQIX) can also count on expected 5G and IoT penetration to fuel growth for the company this year.
Realty Income Corporation (NYSE: O), a real estate trust that concentrates on commercial properties, is among the best REIT stocks to buy now. Last month, the company announced the 610th consecutive common stock monthly dividend for shareholders. Realty Income Corporation (NYSE: O) will benefit from the reopening of shopping centers, small shops, restaurants, and resorts, as well as the expected increase in commercial real estate value as people explore new business ventures with pandemic savings. The first quarter earnings of the trust this year have already beaten market estimates.
Lamar Advertising Company (NASDAQ: LAMR), a real estate firm that sells advertising space, is also on the rebound trail after a disappointing 2020. The quarterly earnings of Lamar Advertising Company (REIT) (NASDAQ: LAMR) have beaten market estimates on revenue and the company says that ad bookings have increased. Since 76% of the revenue for the firm comes from billboard advertising, the increase in bookings will likely lead to solid revenues for the rest of the fiscal year. That's why Lamar Advertising Company (REIT) (NASDAQ: LAMR) is one of the best REIT stocks to buy now.
Another notable REIT stock that is set for a rebound is Simon Property Group (NYSE: SPG). The firm invests in shopping malls and entertainment centers. Simon has recently been given positive stock ratings by investment firms Evercore and Jefferies and the share price of the group has jumped on the back of expected post-pandemic recovery for shopping centers as business resumes in many states across the US. Simon Property Group (NYSE: SPG) is also exploring plans to convert the shopping malls it owns into community centers complete with office buildings and family residences to boost consumer interest in their properties.
It is very important for investors to differentiate between the short-term effects of COVID-19 and the long-term changes brought about by the reaction to the pandemic. It is likely that the decrease in demand for commercial properties at the beginning of 2020 was a short-term effect of the virus due to lockdown restrictions, but it is also equally true that the rise in e-commerce retail and work-from-home culture has left a permanent mark on the office and commercial retail segments. Navigating these complex polarities is going to be normal for much of 2021.
Change is never easy. There are lessons for REIT investors in the finance world where hedge funds have tried to adapt to new technologies with mixed success. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context in mind, here is our list of 10 best REIT stocks to buy right now.
Best REIT Stocks to Buy
10. Kimco Realty Corporation (NYSE: KIM)
Number of Hedge Fund Holders: 22
Kimco Realty Corporation (NYSE: KIM) is a New York-based real estate firm that primarily invests in shopping centers. It is one of the largest publicly traded operators of shopping centers in the United States. It was founded in 1958 and is placed tenth on our list of 10 best REIT stocks to buy right now. It runs more than 400 shopping centers, mostly in large metropolitan areas. The 52-week price range of Kimco stock lies between $8-$21. The share price has been on a consistently upward trajectory over the past few months as the economy recovers.
On April 16, Kimco Realty Corporation (NYSE: KIM) earned a Buy rating from the Bank of America. The bank said that Kimco was one of the essential real estate stocks in the retail sector for the post pandemic economy.
At the end of the fourth quarter of 2020, 22 hedge funds in the database of Insider Monkey held stakes worth $216 million in the firm, the same as in the preceding quarter, worth $183 million.
9. Americold Realty Trust (NYSE: COLD)
Number of Hedge Fund Holders: 29
Americold Realty Trust (NYSE: COLD) is a Georgia-based real estate investment trust that was founded in 2002. It is ranked ninth on our list of 10 best REIT stocks to buy right now. Americold is the largest real estate firm dealing in temperature controlled warehouses in the United States. The firm also has operations in Australia, Canada and Argentina. It owns and runs 185 temperature controlled warehouses for food producers, processors, distributors and retailers. The 52-week price range of Americold stock lies between $29-$41.
On April 6, Americold Realty Trust (NYSE: COLD) was identified as one of the top picks of the Bank of America as REITs moved towards mid-cycle from the post-pandemic recovery. The bank said the REITs with technology exposure looked set to extend gains into the mid cycle.
Out of the hedge funds being tracked by Insider Monkey, Los Angeles-based investment firm Oaktree Capital Management is a leading shareholder in the firm with 11.7 million shares worth more than $439 million.
8. Innovative Industrial Properties, Inc. (NYSE: IIPR)
Number of Hedge Fund Holders: 23
Innovative Industrial Properties, Inc. (NYSE: IIPR) is a Maryland-based real estate investment firm that focuses on the management of properties for licensed cannabis makers. It was founded in 2016 and is ranked eighth on our list of 10 best REIT stocks to buy right now. The 52-week price range of Innovative stock lies between $66-$222. The company owns and operates 69 properties in Arizona, California, Colorado, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, and New York, among others.
On April 19, Innovative Industrial Properties, Inc. (NYSE: IIPR) announced that it had acquired a property in Michigan for $15.4 million. It also said it had entered into an agreement with Green Peak Industries for the management of an industrial building.
At the end of the fourth quarter of 2020, 23 hedge funds in the database of Insider Monkey held stakes worth $317 million in the firm.
7. CyrusOne Inc. (NASDAQ: CONE)
Number of Hedge Fund Holders: 21
CyrusOne Inc. (NASDAQ: CONE) is a Dallas-based real estate trust that operates data centers and provides colocation services. It was founded in 2001 and is ranked seventh on our list of 10 best REIT stocks to buy right now. The trust provides real estate services to 200 Fortune 1000 firms, mostly comprising technology companies. The 52-week price range of the company stock lies between $61-$86. Cyrus provides leading facilities for hybrid-cloud and multi-cloud deployments.
On March 12, investment firm Mizuho gave CyrusOne Inc. (NASDAQ: CONE) stock a Neutral rating despite record lease volumes. The firm said that the reason for the rating was elevated churn and worries about elongated sales cycles.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in the firm with 1.5 million shares worth more than $110 million.
6. Ventas, Inc. (NYSE: VTR)
Number of Hedge Fund Holders: 18
Ventas, Inc. (NYSE: VTR) is a Chicago-based real estate investment trust that primarily manages healthcare facilities. It was founded in 1983 and is placed sixth on our list of 10 best REIT stocks to buy right now. The trust operates more than 1,200 properties and manages a diverse portfolio of properties that make it a very prudent long term investment as it can navigate through economic cycles without big losses. The 52-week price range of Ventas stock is between $25-$58.
On March 30, Bank of America maintained a Buy rating for Ventas, Inc. (NYSE: VTR) but cut its price target to $59.6 from $63, citing softer growth expected in 2022.
Like Equinix, Inc. (REIT) , Lamar Advertising Company (REIT) (NASDAQ: LAMR), Realty Income Corporation (NYSE: O) and Simon Property Group (NYSE: SPG) , VTR is also a sound investment choice for those looking for decent REIT stocks.
At the end of the fourth quarter of 2020, 18 hedge funds in the database of Insider Monkey held stakes worth $137 million in the firm, up from 17 in the previous quarter worth $133 million.
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Disclosure: None. 10 Best REIT Stocks to Buy Right Now is originally published on Insider Monkey.