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 easily invest 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. (AMT), Crown Castle International Corp. (CCI), and Prologis Inc. (PLD). 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. Still, some analysts predict that the industry will recover quickly.

REITs, as represented by the Real Estate Select Sector SPDR ETF (XLRE), have narrowly outperformed the broader market. XLREs 35.1% total return over the past 12 months is just above the Russell 1000 index, which has provided a total return of 34.5%. These market performance numbers and the statistics in the tables below are as of Aug. 23, 2021.

Here are the top 3 REITs with the best value, the fastest growth, and the most momentum.

Best Value REITs

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 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) 8.60 12.4 3.7
AGNC Investment Corp. (AGNC) 16.28 8.5 4.7
New Residential Investment Corp. (NRZ) 9.86 4.6 7.8

Source: YCharts

  • Annaly Capital Management Inc.: Annaly Capital Management invests in real estate and related assets, including agency mortgage-backed securities (MBS), residential and commercial real estate, and middle market lending. On Aug. 11, the company announced cash dividends of $0.434375, $0.40625, and $0.421875 of its Series F Preferred Stock, Series G Preferred Stock, and Series I Preferred Stock, respectively. All dividends are payable on Sep. 30 to preferred shareholders of record as of Sep. 1, 2021.
  • AGNC Investment Corp.: AGNC Investment invests mainly in residential MBS on a leveraged basis through collateralized borrowings. It uses an active portfolio management strategy in order to provide risk-adjusted returns. AGNC announced on Aug. 12 that it would pay a cash dividend of $0.12 per share of common stock for August 2021. The dividend is payable on Sept. 10 to shareholders of record as of Aug. 31, 2021.
  • New Residential Investment Corp.: New Residential Investment invests in the residential housing sector. The company owns mortgage servicing-related assets, residential loans, and similar investments. It also owns a mortgage originator and servicer.

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 year-over-year (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 or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.

Fastest Growing REITs
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
Weyerhaeuser Co. (WY) 34.53 25.9 1,270 92.8
Jones Lang LaSalle Inc. (JLL) 239.58 12.2 1,220 22.5
Sun Communities Inc. (SUI) 196.40 22.8 60.7 100.0

Source: YCharts

  • Weyerhaeuser Co.: Weyerhaeuser is a forest products company that grows and harvests trees and develops real estate. The company also provides construction services and forest products.
  • Jones Lang LaSalle Inc.: Jones Lang LaSalle is a real estate and investment management service provider. The company provides services such as tenant representation, property management, leasing, finance, and valuation services to a variety of corporate and institutional clients globally. Jones Lang LaSalle reported significant gains across a variety of earnings metrics for Q2 2021, including net income and revenue, driven by growth in all of its businesses.
  • Sun Communities Inc.: Sun Communities owns and operates manufactured housing communities. The company owns properties throughout the Midwest and the Southeast regions of the U.S., as well as Canada.

REITs with the Most Momentum

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 (%)
Jones Lang LaSalle Inc. (JLL) 239.58 12.2 147.3
Simon Property Group Inc. (SPG) 129.46 42.5 112.1
CBRE Group Inc. (CBRE) 93.16 31.3 107.4
Russell 1000 N/A N/A 34.5
Real Estate Select Sector SPDR ETF (XLRE) N/A N/A 35.1

Source: YCharts

  • Jones Lang LaSalle Inc.: See above for company description.
  • Simon Property Group Inc.: Simon Property Group is a REIT that owns, develops, and manages malls, outlet centers, community centers, and other related properties. For Q2 2021, Simon reported 142.8% YOY growth in net income attributable to common stockholders on an 18.1% YOY increase in revenue. The company cited increased shopper traffic, retail sales, and leasing activity at its properties as drivers of the performance.
  • CBRE Group Inc.: CBRE Group is a real estate service provider. The company offers valuation, advisory, real estate investment, and property management services. It focuses on offices, hotels, gaming properties, multi-family residences, and data centers. On July 29, the company announced the promotion of chief investment officer Emma Giamartino to global group president, chief financial officer, and chief investment officer. Leah Stearns, CBREs current chief financial officer, will continue with the company in an advisory capacity through the end of 2021.

The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

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