Real Estate Investment Trusts (REITs), one of last year’s top-performing sectors, are popular among investors due to the booming real estate market, dividend advantages, and portfolio diversification. Commercial real estate is the third-largest asset class in the U.S., and REITs may provide a diverse mix of real estate assets and long-term total returns comparable to other stocks. Rising inflation is another primary driver of REIT inflows, as investors look for new ways to produce income and improve their risk-return profiles during such volatile times.
When rates rise, investors often forsake high-dividend-paying equities in favor of bonds, which offer a similar return but pose less risk and volatility. According to recent statistics, REITs have one of the lowest average risks, illustrating the performance of various asset classes following rate rises across three periods. While previous performance is no guarantee of future outcomes, rising rates often indicate that the economy is expanding, leading to increased demand for real estate. Surprisingly, REITs did well throughout both high and low inflation eras. This implies they’re less vulnerable to prediction risk or the chance that investors accurately forecast periods of high inflation.
With that in mind, let’s look at three well-regarded, dividend-paying REITs that the experts consider great portfolio additions in these tumultuous times:
Life Storage Inc (LSI)
Life Storage, Inc. (LSI) is a self-storage REIT that invests in, owns, and manages self-storage facilities. It provides services for business, automobile, and wine storage. Robert J. Attea, David L. Rogers, Kenneth F. Myszka, and Charles E. Lannon started the firm in 1982, and it is based in Buffalo, New York. With over 1,000 sites in the United States and Canada, LSI owes to e-commerce driving warehouse demand and the requirement for product storage as well as the tech industry’s servers. Occupancy and rental rates have remained high due to supply chain concerns, which gives LSI an advantage over other REITs.
LSI has the kind of robust financials we all look for in a stock. They have an impressive earnings report history, most recently beating quarterly EPS projections by 6.83% and revenue expectations by 4.78%. LSI shows very healthy year-over-year numbers, with notable revenue growth of 33.03% and EPS growth of 56.14%. Until reporting again, LSI offers $230 million in sales at 90 cents per share. LSI currently has a dividend yield of 2.75%, with a nice quarterly cash payout of $1.00 per share. LSI has a consensus price target of 154.00 among analysts that provide 12-month price estimates, with a high of 204.00 and a low of 138.00. The median estimate implies an increase of 5.79% over current pricing, and the consensus gives LSI a sturdy buy rating that we should keep in mind.
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Essential Properties Realty Trust Inc (EPRT)
Essential Buildings Realty Trust, Inc. (EPRT) acquires and manages single-tenant properties that are net leased to middle-market enterprises that operate service-oriented or experience-based businesses on a long-term basis. Captain D’s, Art Van Furniture, Mister and Zips Car Wash, AMC Theaters, Perkins, 84 Lumber, Mirabito, Ruby Tuesday, and White Oak Station are among its clients. EPRT was created on January 12th, 2018, and is based in Princeton, New Jersey.
EPRT, when it comes to its financials, boasts one of my favorite distinctions when researching these stocks: It has bested analysts’ EPS and revenue forecasts for the last four consecutive fiscal quarters. Most recently, it beat EPS projections by 7.00% and revenue forecasts by 6.28%. EPRT has shown solid year-over-year growth, most notably impressive revenue and EPS growth of 55.24% and 360%, respectively. EPRT shows $63.5 million in sales for its current quarter, at 22 cents per share. EPRT presently has a dividend yield of 4.06%, with a 26 cents per share quarterly payout. EPRT has a median price target of 30.00, with a high of 36.00 and a low of 28.00 among the analysts who provide 12-month price projections. The consensus forecast is up 17.05%, and EPRT has earned its nearly uncontested buy rating.
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W.P. Carey Inc (WPC)
W.P. Carey, Inc. (WPC) is a REIT that invests in real estate of various kinds. Real Estate Ownership and Investment Management are the two segments through which it operates. The Real Estate Ownership section owns and invests in commercial real estate properties. The Investment Management section develops and negotiates REIT investments and debt placement deals and manages REIT portfolios. William Polk Carey created the firm in 1973, and it is based in New York, NY.
WPC most recently bested Wall Street analysts’ quarterly earnings projections relatively easily. EPS projections were, impressively, most recently beaten by 10.30%, and revenue expectations were surpassed by 13.33%. WPC has a long history of outperforming experts’ forecasts regarding revenue in particular. WPC’s current quarter shows us $336.7 million in sales, at an EPS of 62 cents per share. WPC boasts an impressive dividend yield of 5.08%, with an equally remarkable quarterly payout of $1.06 per share. The consensus price target for WPC from the analysts that provide 12-month predictions is 87.00, with a high of 91.00 and a low of 80.00. The median estimate reflects an increase of 4.64% over its most recent price, and WPC has earned a very strong buy rating that prospective investors should have on their radar.
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