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Buying shares in real estate companies can give you the same benefits as investing in real property. You could be earning passive income from rental revenue and capital gains without hammering a nail. That’s where real estate stocks come in.
Real estate stocks give you exposure to companies that develop and manage commercial, residential and industrial properties. These companies share a piece of the action with you through publicly-traded real estate investment trusts (REITs).
Like any other stock, you trade REITs in the open market. These real estate stocks provide a low-cost way of sharing in real estate revenue and gains. There are other stocks that provide exposure to the real estate market, even to mortgage rates, the home sellers’ market, the general housing market and movement in the homebuyer’s market. Nevertheless, the publicly-traded REITs category dominates real estate stocks.
The following list of top real estate stocks reflects this.
Symbol | Company | % Change | Price | Dividend Yield | Invest |
---|---|---|---|---|---|
PSA | Public Storage |
+ 0%
|
$289.03 | 12 / 4.15% | Buy stock |
SPG | Simon Property Group |
+ 0.28%
|
$123.75 | 7.4 / 5.98% | Buy stock |
O | Realty Income |
+ 1.44%
|
$62.62 | 3.066 / 4.9% | Buy stock |
EQIX) |
+ 0%
|
$0.000000 | N/A | Buy stock | |
EXR | Extra Space Storage |
– 1.44%
|
$146.82 | 4.04 / 2.75% | Buy stock |
AMT | American Tower |
+ 0%
|
$184.65 | 6.28 / 3.4% | Buy stock |
ARE | Alexandria Real Estate |
+ 0%
|
$121.25 | 4.96 / 4.09% | Buy stock |
Table of contents
[Show]
Public Storage (NYSE:PSA)
Public Storage (NYSE:PSA)
289.030
0
[0%]
Sell
Trade Now
–
270.13 – 356.81
175.81M
0.00K/86.86K
50.81B
175.81M
12/4.15%
38.270
137.35M
Public Storage is an industrial REIT with membership in the S&P 500. With over 158 million net rentable square feet, it claims to be the world’s largest landlord. Public Storage is a buyer, developer and operator of self-storage facilities. Presently, it has thousands of facilities in 38 states and 7 countries. Also, it is a 3rd-party manager of storage facilities.
In Public Storage’s 4th quarter earnings report for 2019, it posted a $10.3 million net operating income. It credited the earnings boost to a 0.07 million increase in Same Storage facilities and a $9.6 million increase in non-same store facilities. At the end of last year, Public Storage’s FFO was $10.58 per share.
Simon Property Group (NYSE:SPG)
Simon Property Group (NYSE:SPG)
123.750
0.34
[0.28%]
Sell
Trade Now
121.92 – 123.97
86.05 – 133.08
123.34
327.00M
0.00K/1.46M
40.47B
327.00M
7.4/5.98%
106.820
240.86M
Simon Property Group is a real estate trust with active ownership in dining, entertainment, shopping and mixed-use destinations. It owns properties in North America, Europe and Asia. Millions of people gather at its locations — resulting in billions of dollars in annual sales.
The real estate company generates income from leasing space in properties developed into office space, regional malls, community lifestyle centers, hotels and residential properties. For the first 9 months of 2019, Simon Property Group reported a FFO of $5.15 per share.
Realty Income (NYSE:O)
Realty Income (NYSE:O)
62.620
0.89
[1.44%]
Sell
Trade Now
61.47 – 62.64
55.51 – 75.1
62
673.22M
0.00K/4.07M
42.16B
673.22M
3.066/4.9%
210.350
571.80M
Realty Income owns roughly 11,100 properties, most of which are freestanding, single-tenant, triple-net-leased retail properties. Its properties are located in 49 states and Puerto Rico and are leased to 250 tenants from 47 industries. Recent acquisitions have added industrial, office, manufacturing, and distribution properties, which make up roughly 17% of revenue.
Equinix (NASDAQ:EQIX)
Equinix (NASDAQ:EQIX)
810.510
-2.22
[-0.27%]
Sell
Trade Now
795.96 – 811.99
495.11 – 816.22
806.13
93.52M
0.00K/45.78K
75.80B
93.52M
13.64/1.68%
144.100
71.65M
Equinix Inc. is a global digital infrastructure company that provides customers with access to data centers and services such as secure key management, network visualization, Equinix marketplace and customer support.
The digital services stock has a market cap of $65 billion and an EPS of $5.08. It has a 52-week low of $477.87 and a 52-week high of $839.77. Equinix has an annual dividend yield of $10.64 per share. It has high liquidity and trades more than 488,033 shares per day. Equinix generated revenue of $5.5 billion in 2019.
Extra Space Storage (NYSE:EXR)
Extra Space Storage (NYSE:EXR)
146.820
0
[0%]
Sell
Trade Now
–
139.97 – 216.33
135.05M
0.00K/1.23M
19.83B
135.05M
4.04/2.75%
96.380
96.80M
Extra Space Storage owns, operates, and manages more than 1,800 self-storage properties in 38 states, with over 100 million net rentable square feet of storage space. Of these properties, the majority are wholly owned, while some facilities are owned through joint ventures and others are owned by third parties and managed by Extra Space Storage in exchange for a management fee. The company is structured as an umbrella partnership REIT, or UPREIT.
American Tower (NYSE:AMT)
American Tower (NYSE:AMT)
184.650
0
[0%]
Sell
Trade Now
–
178.53 – 282.425
466.04M
0.00K/2.15M
86.05B
466.04M
6.28/3.4%
149.660
403.50M
American Tower is a specialized REIT that handles the world’s largest portfolio of wireless communication and broadcast towers.
Alexandria Real Estate (NYSE:ARE)
Alexandria Real Estate (NYSE:ARE)
121.250
0
[0%]
Sell
Trade Now
–
108.81 – 172.65
173.01M
0.00K/97.98K
20.98B
173.01M
4.96/4.09%
104.370
145.27M
Alexandria Real Estate Equities owns properties with office and laboratory space for the life sciences industry, featuring many high-quality tenants with long-duration leases that provide financial stability.
Overview: Real Estate Stocks
As a means of including the average investor into the lucrative real estate market, the U.S. Congress passed the Real Estate Investment Act in 1960. The bill’s sponsors wanted to duplicate the success of the mutual fund industry as a way of attracting capital to the real estate industry. So, they used the mutual fund equity structure to design a mutual fund for real estate. This became a means for people without much investment capital to benefit from real estate and its broader market. Real estate investing can be hit by a company’s balance sheet, retail centers or shopping centers, capital appreciation, luxury homes and the general property sector.
Although REITs had been around for over 30 years, these funds did not become popular until the credit crunch hit in 1992 or so. The hotel industry, in particular, turned to REITs as a source of financing when the banks turned them away. Residential and industrial divisions soon followed the commercial real estate industry. By the end of 2001, REITs had become the No.1 institutional source of real estate capital with equity of $146 billion — or 39% of capital sources.
By law, REITs must distribute 90% of net income to the shareholders in the form of dividends. The dividend revenue comes from rental income and capital gains. Publicly traded REITs typically have higher dividend yields than other equity investments. Since you can easily trade REITs, you can tap in into this reliable real estate income source without losing your investment’s liquidity.
Best Online Brokers for Real Estate Stock
Online brokers can simplify the process of trading real estate stocks. You’ll be able to thoroughly research your investment options, make smooth trade and keep track of your portfolio in one central space.
Features to Look for in Real Estate Stock
These are the top things to look for when deciding on the best real estate stocks.
Earnings Growth
The key earnings indicator of real estate stocks is the funds from operations (FFOs). You calculate the FFO by subtracting the gains from the sales of property from the net income and adding depreciation and amortization. The FFO per share is your dividend yield. Ideally, a company should show a gradual increase in this metric. You can find a real estate company’s FFO history in the quarterly income report on the company’s website. The 4th quarter report also has year-end totals.
Management Team
A good management team is imperative to the consistent operation of a real estate company. Poor management can result in cost overruns and sluggish rental income. In the company’s income report, you can use the cash flow summary to get some insight into the management’s operating, investing and financing activities. While you are on the company’s website, take a look at the executive profiles.
Diversification
Before you decide to buy a real estate company’s stock, take a look at its basket of properties. Are the properties in the same area? Does the company provide only one or two services? Be careful. Real Estate companies with a narrow reach may lack diversification, leaving them subject to the same risk factors such as hurricanes, service specific restrictions or local strife.
Significance of Investing in Real Estate Stocks
Real estate stocks in the form of REITs present an investment opportunity for you to earn better-than-average income without assuming much risk or losing liquidity from your investment capital. The 5 real estate stocks we have highlighted are an elite group in this sector. Covering everything from a cell tower to an office, farmland and much more.
Frequently Asked Questions
How to buy real estate stocks?
You can buy real estate stocks by investing in individual companies, exchange-traded funds (ETFs), or mutual funds.
Answer Link
Are REITS a good investment?
REITs can be a great way to diviversity your portfolio and can be a great investment.
Answer Link
The post Best Real Estate Stocks Right Now by John Burson appeared first on Benzinga. Visit Benzinga to get more great content like this.