Real Estate Stocks: 7 Real Estate Stocks to Tour Before Year’s End
Real estate stocks and real estate investment trusts (REITs) are a very diverse investment group. Basically, REITs are landlords, but the characteristics they control are wide-ranging. From vacant lots to shopping malls and warehouses to simply holding mortgages on residential real estate, diversity is a blessing – but it can also be a curse.
You can’t just buy REITs when interest rates are low. They think a real estate boom is good for the entire sector. As we’ve seen, shopping malls are having a tough time and the pandemic is changing the way consumers shop.
Mortgage rates are also low, but the sustained surge in Covid-19 cases can lead to an increase in default rates. And working from home is a long-term trend, not a short-term solution, so office buildings in big cities are not necessarily easy to get to.
Think of this as an early Christmas present. These seven real estate stocks, slated to tour before the end of the year, have currently been selected as the best REITs in the longest-lived sectors. In addition to the REITs, there are also some pure real estate games.
- CoreSite Realty (NYSE:COR)
- Hannon Armstrong Sustainable Infrastructure (NYSE:HASI)
- St. Joe Company (NYSE:Joe)
- Redfin Corp. (NASDAQ:RDFN)
- Safehold Inc. (NYSE:FOR SURE)
- Uniti Group Inc. (NASDAQ:UNIT)
- Innovative industrial real estate (NYSE:IIPR)
Real estate stocks: CoreSite Realty (COR)
Source: zhu difeng / ShutterStock.com
As we continue to work remotely, shop remotely, and get our groceries remotely, there is greater demand for computer networks and telecommunications systems.
And this will only increase in the future if we build new logistics networks for the movement of goods and everything becomes “more intelligent” – like our cars, clothes and houses.
For this reason, COR is a good choice when it comes to real estate stocks. The company builds, operates and maintains data centers. Large companies use COR as well as smaller companies. The simple fact, however, is that this is a great growth sector and that there is a distinct advantage in being one of the leading REITs in the space.
The COR share has risen by almost 9% in the past 12 months and has a dividend of 4%. Currently, this stock appears to be consolidating after a multi-year run. It is a good time to intervene.
Hannon Armstrong Sustainable Infrastructure (HASI)
One of the massive new trends in the markets is ESG investing. ESG stands for Environmental, Social and Governance. Basically, it’s about rethinking how companies can be valued in a broader perspective, taking into account the company’s ecological footprint, what it gives back to its employees and society, and how transparently and diverse it governs.
Hannon Armstrong Sustainable Infrastructure is a REIT that not only specializes in real estate management with an emphasis on green projects, but also works with governments to build many of these projects. That said, HASI has some very reliable customers.
And its importance in the ESG means that a lot of money will find its way.
HASI is up 79% over the past year but only has a P / E ratio of 36 and continues to offer a dividend of 2.6%. For this reason, the stock in my Grader portfolio has a “B” rating and a buy recommendation.
St. Joe Company (JOE)
This real estate company is pretty close to a REIT, but isn’t. And since it doesn’t, it doesn’t have the dividend that most REITs have. This is because investors are not treated as owners, which divides the company’s net income.
The St. Joe Company is based in Florida and built a unique business centered around one of the state’s major economic drivers – Snowbirds. These are the people who come from the northern climes to bask in the warmth of Florida, usually only for the winter months. JOE builds residential properties as well as resorts and commercial space around these communities. It also develops hotels, restaurants, and other commercial establishments.
The stock is up 74% this year but only delivers a dividend of less than 1%. Nevertheless, I gave him a “B” rating and a buy recommendation for my portfolio grader.
Redfin Corp (RDFN)
One of the new trends in real estate stocks is investing in online services that make listing and shopping for a home easier, especially remotely.
Redfin is one of the big players in this area. In over 90 markets in the US and Canada, the online brokerage company sells and buys more than 235,000 homes annually. This is also not a short-term event. Online real estate agents are part of a trend that is the next evolution in buying and selling real estate in the consumer market.
The stock is up 142% over the past year and is using this new capital to expand its operations in North America. At this point in time, the company has a market cap of $ 5.25 billion. So it’s in a period of growth that should last a while, given low interest rates and an economy nearing pandemic recovery.
RDFN currently has a “B” rating in Portfolio Graders.
Safehold Inc. (SAFE)
We have all heard the saying that the three most important things in real estate are location, location, location.
Well, Safehold built a REIT around that concept. It is one of the leading ground lease REITs in the USA. This means that vacant properties are rented out to a tenant who can then build whatever he wants on the property. The tenant usually holds this lease for a long period (e.g. 50 years).
You can imagine concluding long-term leases in large cities. However, since all sales channels are set up for e-commerce, warehouses and distribution centers also play a major role, especially near port cities.
SAFE is a relative newcomer to the sector, but has well-distributed real estate in the US, particularly in the west and northeast. It has a market cap of $ 3.62 billion and a dividend of nearly 1%. But the stock is up 63% over the past year, and more is to come. For this reason, I rated SAFE “B” in Portfolio Grader.
Uniti Group (UNIT)
Not all REITs have to do with consumer or commercial real estate. Some fill in the niches associated with the invisible infrastructure that keeps our mobile world moving.
Uniti is part of that niche. It is a leading provider of communications infrastructure for all aspects of the telecommunications industry. That said, it owns towers, repeaters, fiber optics, and other assets that serve the telecommunications sector in the eastern and central US
The mere fact that it is listed on tech-intensive NASDAQ rather than REIT-standard NYSE shows you that it sees itself as a tech company as well as a REIT.
The stock is up 61% over the past year and still offers a dividend of 5.7%. It’s in the right place at the right time, making it a perfect pick for my list of top real estate stocks.
UNIT has a “B” rating and a buy recommendation in Portfolio Grader.
Innovative industrial real estate (IIPR)
It’s hard to believe how fast the cannabis industry is growing in the US and Canada. However, there are challenges when it comes to legalizing cannabis under state law, but not federal law.
One of them is banking. Federally insured banks cannot take money from cannabis growers, retailers, or wholesalers. That may change as more states legalize marijuana for medical or recreational purposes. Many states see tax revenue from legalization as a great help during these troubled times.
One way to get around the state / federal dilemma is to invest in a company that leases real estate to producers in states where it is legal. That’s what Innovative Industrial Properties does. It’s a weed REIT.
And that has been very good business lately. IIPR stock is up 109% over the past year and still has a dividend of 3.2%. So put that in your pipe and smoke it.
IIPR has a “B” rating in Portfolio Graders.
At the time of writing, Louis Navellier has a long position in SAFE for this article. Louis Navellier held other positions (either directly or indirectly) in the securities referred to in this article.
The InvestorPlace Research associate primarily responsible for this article has held (neither directly nor indirectly) positions in the securities identified in this article.
Louis Navellier got off to an unconventional start as a student who accidentally built a market-beating stock system – with returns with Warren Buffett. In his latest achievement, Louis discovered the “master key” from which he could benefit the greatest technical revolution of this (or any) generation.