4 REITs Building Investors Hopes This Earnings Season

Moreover, the failure of the Trump administration to pass a Republican-led Healthcare bill through the House of Representatives had an adverse impact on investors’ confidence and raised doubts over his other promises. This flared up volatility in the market and brought the mojo back to the REIT space as investors, particularly the income seeking ones, are looking for a safer refuge.

Further, $23.11 billion capital raised in equity and debt in first-quarter 2017 by publicly listed REITs set a 3-year record per the reit.com report.This indicates investors' faith in this sector and their willingness to pour money into it.

However, not all REITs are equally poised to excel. In fact, besides the rate issue, the performance of REIT stocks depends on the individual asset class to which they cater as well as the location of their assets. In this regard, there have been supply issues in a number of asset categories.

Per a study by the commercial real estate services’ firm – CBRE Group Inc. (CBG) – the overall U.S. industrial real estate market remained upbeat in first-quarter 2017, with an essentially unchanged national availability rate despite increased supply. However, the overall office vacancy rate moved up modestly by 10 basis points to 13.0% in Q1 amid increased supply, according to a report from CBRE. Moreover, dwindling mall traffic and store closures amid aggressive growth in online sales kept retail REITs on tenterhooks. Also, an increasing number of deliveries of new units in a number of key markets and elevated concession activity have raised concerns for some of the residential REIT stocks.

The Zacks Methodology

Amid these, choosing the right stock could be quite difficult unless one knows the proper method. To make the task simple, we rely on the Zacks methodology, which takes into account a favorable Zacks Rank – Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold) – and a positive Earnings ESP.

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