3 REITs To Buy Amid Q2 Earnings Season

The stock market’s impressive run over the last several years placed high-flying growth stocks, often from the technology sector, front and center. And the 2019 comeback has been driven once again by mega-cap tech giants. Nonetheless, a strong portfolio needs to be well-diversified. This means time is always right to consider real estate investment trusts or REITs.

REITs are companies that own, operate, or finance real estate properties that produce income, such as apartment complexes or retail locations. These companies are heavily regulated and must meet a number of qualifications to be classified as a REIT, but they do offer investors a few distinct advantages.

First, real estate can be a very profitable investment sector when certain economic conditions are present. What’s more, REITs must pay at least 90% of their taxable income in dividends to shareholders, so they are a great option for income investors looking for steady payouts.

The presence of mortgage debt makes this a rate-sensitive industry. But many companies offset this through strong funds from operations (FFO) growth, or they stick out from the pack with large amounts of their debt already fixed at a low rate.

Luckily our proven Zacks Rank, which emphasizes earnings estimates and estimate revisions, works with REITs just as it does with any other company. We prefer to use FFO as the metric of profitability here, but the trends work the same otherwise.

The strongest REITs are going to be those with improving outlooks and great Zacks Ranks. So, let’s check out the REITs that our model says are impressive options right now…

1. Alexandria Real Estate Equities, Inc. (ARE - Free Report)

Alexandria Real Estate Equities owns, operates, and develops collaborative technology and life science campuses mostly in coastal regions of the U.S. The firm focuses on what it calls “innovation clusters.” These include New York City, Greater Boston, Seattle, San Francisco, and a few other areas. The firm is coming off a better-than-projected first quarter and has seen its stock price climb over 23% in 2019 to outpace its industry’s 19.5% average. Looking ahead, ARE is scheduled to release its Q2 financial results on Monday, July 29.

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