Top REITs for April 2022

Real estate investment trusts (REITs) are publicly traded companies that allow individual investors to buy shares in real estate portfolios that receive income from a variety of properties. They allow investors to invest easily in the real estate sector, which includes companies that own, develop, and manage residential, commercial, and industrial properties.

Among other requirements, REITs are required to pay out at least 90% of their taxable income as dividends. A key REIT metric is funds from operations (FFO), a measure of earnings particular to the industry. Some big names within the sector include American Tower Corp., Crown Castle International Corp., and Prologis Inc.

The COVID-19 pandemic has significantly disrupted the commercial real estate industry, as workers around the world have adapted to working from home and various lockdown measures have been enacted. Despite the economy’s rebound, the industry’s recovery has been uneven: the corporate office sector generally has performed worse than residential real estate and apartments. Consumers, too, have been disrupted. For example, workers who are returning to cities to live and work are now encountering soaring prices for privately owned apartments and commercial apartments—prices that are dramatically higher than when they left.

REITs, as represented by an exchange-traded fund (ETF)—the Real Estate Select Sector SPDR Fund (XLRE)—have outperformed the broader market. XLRE’s 25.4% total return over the past 12 months bested the benchmark Russell 1000 index, which has provided a total return of 12.9%. These market performance numbers and the statistics in the tables below are as of March 21, 2022.

Here are the top three REITs with the best value, fastest growth, and most momentum.

These are the REITs with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows that you’re paying less for each dollar of profit generated.

Best Value REITs
  Price ($) Market Cap ($B) 12-Month Trailing P/E Ratio
Annaly Capital Management Inc. (NLY) 7.12 10.4 4.4
New Residential Investment Corp. (NRZ) 10.57 4.9 6.9
AGNC Investment Corp. (AGNC) 13.01 6.8 10.9

Source: YCharts

  • Annaly Capital Management Inc.: Annaly Capital invests in real estate and related assets, including agency mortgage-backed securities (MBS), residential and commercial real estate, and middle-market lending. On March 17, the company declared a first-quarter 2022 common stock cash dividend of 22 cents per common share which is payable on April 29 to shareholders of record on March 31.
  • New Residential Investment Corp.: New Residential Investment is a public REIT investing in the residential housing sector. The company’s portfolio includes mortgage-servicing related assets, residential loans, non-agency securities, and other similar investments. On March 21, the company declared a first quarter dividend of 25 cents per share that is payable on April 29 to shareholders of record on April 4.
  • AGNC Investment Corp.: AGNC Investment invests mainly in residential MBS on a leveraged basis through collateralized borrowings. It uses an active portfolio management strategy to provide risk-adjusted returns. On March 10, the company declared first quarter cash dividends on four fixed-to-floating rate preferred securities. Each dividend is payable on April 15 for shareholders of record as of April 1.

Fastest Growing REITs

These are the top REITs as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.

Fastest Growing REITs
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
Boston Properties Inc. (BXP) 125.51 19.7 2.3 9.9
Digital Realty Trust Inc. (DLR) 137.81 39.0 2,2 4.6
New Residential Investment Corp. (NRZ) 10.57 4.9 106.2 119.2

Source: YCharts

  • Boston Properties Inc.: Boston Properties is a major developer, owner, and manager of Class A office properties in Boston, Los Angeles, New York, San Francisco, Seattle, and Washington. On March 21, the company declared a regular quarterly cash dividend of 98 cents per share of common stock for the quarter ending March 31. The dividend is payable on April 29 to shareholders of record as of March 31.
  • Digital Realty Trust Inc.: Digital Realty Trust is a real estate investment trust (REIT) that owns, acquires, and manages technology-related properties. The company focuses on data center, colocation and interconnection-related properties. On March 3, the company authorized a 5% increase it its cash dividend to $1.22 per share for the first quarter of 2022. The dividend is payable to common stock shareholders on March 31 for shareholders of record as of March 15.
  • New Residential Investment Corp.: See company description above.

These are the REITs that had the highest total return over the last 12 months.

REITs with the Most Momentum
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Life Storage Inc. (LSI) 135.62 11.4 65.4
Prologis Inc (PLD) 158.92 117.6 61.3
Public Storage (PSA) 376.56 64.5 61.3
Russell 1000 N/A N/A 12.9
Real Estate Select Sector SPDR Fund (XLRE) N/A N/A 25.4

Source: YCharts

  • Life Storage Inc.: Life Storage owns and operates self-storage properties in dozens of U.S. states. The company operates over 1,000 storage facilities. On Feb. 24, the company reported that net income attributable to common shareholders and revenue rose sharply during Q4 2021 ended Dec. 31, 2021. Same store revenue rose 16.9% and same store net operating income increased 23.9.
  • Prologis Inc. Prologis is a major real estate company that focuses on logistics and warehouse propertie. The company leases modern distribution facilities to a diverse base of approximately 5,200 customers across two major categories: business-to-business and retail/online fulfillment.
  • Public Storage: Public Storage is the leading provider of storage units for your personal, business and vehicle needs with thousands of locations nationwide. 

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