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The stock market’s strong run over the past few years brought attention to high-flying growth stocks, usually from the technology sector, that were consistently outpacing the market. However, fresh volatility within the last few months has shifted the focus back towards other investment strategies, and now it might be time for investors to check out things like 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 of all, 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.
Luckily for Zacks readers, the proven Zacks Rank—which emphasizes earnings estimates and estimate revisions—works with REITs just as it would with any other company. The strongest REITs are going to be those with improving outlooks and great Zacks Ranks.
With that said, check out the REITs that are model says are impressive options right now:
1. Innovative Industrial Properties, Inc. (IIPR - Free Report)
Innovative Industrial Properties is a REIT focused on the acquisition, ownership and management of specialized industrial properties for medical-use cannabis facilities. Weed stocks can be unpredictable, but IIPR has generated some solid momentum over the past two months after the company’s recent acquisition of an 89,000-square-foot facility in Pennsylvania.
IIPR is currently sporting a Zacks Rank #2 (Buy). Analyst sentiment for the company is warming, and the Zacks Consensus Estimate for its annual earnings has increased six cents over the last 60 days. Earnings growth is now expected to touch 106% in the current year and an additional 89% in 2019. The stock has surged more than 28% in the past two months and could be an interesting momentum pick as it looks to test its 52-week high again.
Americold is focused on owning and operating temperature-controlled warehouses. The company is based in Atlanta and operates primarily in the U.S., Australia, and New Zealand. Americold’s dividend payout is about 2.5% right now, and the stock is currently holding a Zacks Rank #1 (Strong Buy).
This REIT just crushed earnings estimates by more than 40%, and the outlook for the remainder of its fiscal year has improved accordingly. In fact, our full-year consensus EPS projection has ticked up three cents in the last month. Shares are slightly pricey at 20.6x forward earnings, but that price might be right for a stock surging toward new all-time highs.
3. New Residential Investment Corp.
New Residential is a mortgage REIT focused on the residential real estate market. The company deals primarily with mortgage servicing rights (MSRs), having pioneered investments in so-called Excess MSRs—which enable it to collect monthly cash flows without assuming some servicing duties, advance obligations, or liabilities.
NRZ is a Zacks Rank #1 (Strong Buy) and offers a dividend yield of about 11.1%. The stock is also an interesting value play, with shares trading at just 7.8x forward earnings. The company’s P/B ratio of 1.1 is also in an attractive territory. The firm also recently beat earnings estimates and watched its 2018 outlook improve significantly. Shares have since been testing a new 52-week high.
Want more market analysis from this author? Make sure to follow @Ryan_McQueeneyon Twitter!
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
3 Great REITs to Buy Right Now
The stock market’s strong run over the past few years brought attention to high-flying growth stocks, usually from the technology sector, that were consistently outpacing the market. However, fresh volatility within the last few months has shifted the focus back towards other investment strategies, and now it might be time for investors to check out things like 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 of all, 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.
Luckily for Zacks readers, the proven Zacks Rank—which emphasizes earnings estimates and estimate revisions—works with REITs just as it would with any other company. The strongest REITs are going to be those with improving outlooks and great Zacks Ranks.
With that said, check out the REITs that are model says are impressive options right now:
1. Innovative Industrial Properties, Inc. (IIPR - Free Report)
Innovative Industrial Properties is a REIT focused on the acquisition, ownership and management of specialized industrial properties for medical-use cannabis facilities. Weed stocks can be unpredictable, but IIPR has generated some solid momentum over the past two months after the company’s recent acquisition of an 89,000-square-foot facility in Pennsylvania.
IIPR is currently sporting a Zacks Rank #2 (Buy). Analyst sentiment for the company is warming, and the Zacks Consensus Estimate for its annual earnings has increased six cents over the last 60 days. Earnings growth is now expected to touch 106% in the current year and an additional 89% in 2019. The stock has surged more than 28% in the past two months and could be an interesting momentum pick as it looks to test its 52-week high again.
2. Americold Realty Trust (COLD - Free Report)
Americold is focused on owning and operating temperature-controlled warehouses. The company is based in Atlanta and operates primarily in the U.S., Australia, and New Zealand. Americold’s dividend payout is about 2.5% right now, and the stock is currently holding a Zacks Rank #1 (Strong Buy).
This REIT just crushed earnings estimates by more than 40%, and the outlook for the remainder of its fiscal year has improved accordingly. In fact, our full-year consensus EPS projection has ticked up three cents in the last month. Shares are slightly pricey at 20.6x forward earnings, but that price might be right for a stock surging toward new all-time highs.
3. New Residential Investment Corp.
New Residential is a mortgage REIT focused on the residential real estate market. The company deals primarily with mortgage servicing rights (MSRs), having pioneered investments in so-called Excess MSRs—which enable it to collect monthly cash flows without assuming some servicing duties, advance obligations, or liabilities.
NRZ is a Zacks Rank #1 (Strong Buy) and offers a dividend yield of about 11.1%. The stock is also an interesting value play, with shares trading at just 7.8x forward earnings. The company’s P/B ratio of 1.1 is also in an attractive territory. The firm also recently beat earnings estimates and watched its 2018 outlook improve significantly. Shares have since been testing a new 52-week high.
Want more market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>