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Vornado Realty (XNYS:VNO)
Vornado Realty Trust is an owner, manager and developer of office and retail assets. It has a concentration of premier real estate assets in Chicago, New York, San Francisco and Manhattan.
The real estate stock has a market cap of $6 billion and an EPS of $1.70. It has an annual dividend yield of $2.12 per share. Vornado Realty Trust has high liquidity and trades more than 303,000 shares per day. It generated revenue of $1.9 billion in 2019.
|Day Range23.56 - 24.07||52 Wk Range22.83 - 47.26||Open / Close23.56 / -||Float / Outstanding- / 191.8M|
|Vol / Avg.1.8M / 2.1M||Mkt Cap4.6B||P/E35.34||50d Avg. Price27.35|
|Div / Yield2.12/9.15%||Payout Ratio323.18||Total Float-||EPS-|
Annaly Capital Management (XNYS:NLY)
Annaly Capital Management Inc is an American mortgage real estate investment trust. The company segments its operations into Residential and Commercial real estate investments. While Annaly’s Residential assets are primarily comprised of agency mortgage-backed securities and debentures, it is primarily invested in commercial mortgage loans and mortgage-backed securities in its Commercial unit through its subsidiary, Annaly Commercial Real Estate Group. Agency mortgage-backed securities and debentures make up the majority of the company’s overall portfolio. Most of the company’s counterparties are located in the U.S. Annaly generates nearly all of its revenue from the spread between interest earned on its assets and interest payments made on its borrowings.
|Day Range17.72 - 18.63||52 Wk Range16.52 - 32.72||Open / Close17.79 / -||Float / Outstanding- / 431.1M|
|Vol / Avg.10.6M / 9.4M||Mkt Cap8B||P/E1.74||50d Avg. Price25.16|
|Div / Yield3.52/20.25%||Payout Ratio35.2||Total Float-||EPS-|
Realty Income (XNYS:O)
Realty Income owns roughly 6,600 properties, most of which are freestanding, single-tenant, triple-net-leased retail properties. Its properties are located in 49 states and Puerto Rico and are leased to 250 tenants from 47 industries. Recent acquisitions have added industrial, office, manufacturing, and distribution properties, which make up roughly 18% of revenue.
|Day Range59.53 - 61.08||52 Wk Range57.61 - 75.4||Open / Close59.77 / -||Float / Outstanding- / 617.6M|
|Vol / Avg.1.9M / 3.8M||Mkt Cap37.1B||P/E59.82||50d Avg. Price68.56|
|Div / Yield2.98/5.03%||Payout Ratio294.65||Total Float-||EPS-|
SL Green Realty (XNYS:SLG)
SL Green is the largest Manhattan property owner and landlord, with around 46 million square feet of wholly owned and joint venture office space. The company has additional property exposure through its limited portfolio of well-located retail space. It operates as a real estate investment trust.
|Day Range40.89 - 42.02||52 Wk Range38.67 - 83.96||Open / Close40.95 / -||Float / Outstanding- / 64.3M|
|Vol / Avg.742.5K / 970.9K||Mkt Cap2.7B||P/E9.39||50d Avg. Price46.26|
|Div / Yield3.73/9.26%||Payout Ratio87.43||Total Float-||EPS-|
American Tower (XNYS:AMT)
American Tower owns and operates more than 180,000 cell towers throughout the U.S., Asia, Latin America, Europe, and the Middle East. It leases space on its towers to wireless service providers, which install equipment on the towers to support their wireless networks. The company has a very concentrated customer base, with most revenue in each market being generated by just the top few mobile carriers. The company operates more than 40,000 towers in the U.S., which accounted for more than half of its total revenue in 2020. Outside the U.S., American Tower’s greatest presence is in India and Brazil, where it operates roughly 75,000 and 19,000 towers, respectively. American Tower operates as a real estate investment trust.
|Day Range218.8 - 224.34||52 Wk Range211.38 - 292.55||Open / Close219.07 / -||Float / Outstanding- / 465.6M|
|Vol / Avg.879.7K / 1.5M||Mkt Cap102.2B||P/E35.78||50d Avg. Price256.43|
|Div / Yield5.88/2.71%||Payout Ratio91.1||Total Float-||EPS-|
You’ve probably heard the saying that you never lose when you invest in property. While property can be a solid investment, traditional real estate investing can also be a headache. It’s a longer-term commitment that depends on a fluctuating real estate market and can produce illiquid investments. However, a real estate investment trust (REIT) offers a hands-off way to benefit from real estate by investing in property that is highly liquid.
Overview: REIT Stocks
REITs are companies that own and operate real estate or real estate debt. REITs are publically traded on the stock exchange. These companies buy real estate or real estate assets using combined investments from investors. Most REITs focus on a particular property type, but some hold multiple types of properties in their investment portfolios.
A REIT buys and develops real estate with the intent to lease property space and collect income. REIT companies are required by law to pay at least 90% of their taxable income for shareholders via dividends. REIT shareholders can earn a steady income from their investments but are required to pay taxes on that income.
There are 4 types of REITs:
- Equity REITs are the most common type of REIT investment. Equity REITs own or operate income-producing real estate, are publicly traded and generate revenue from rental incomes and typically invest in retail, residential, industrial or resort properties.
- Mortgage REITs (mREITs) provide financing for real estate by lending money to real estate buyers or acquiring mortgages. mREITs are publicly traded and generate income from the interest earned on mortgage loans.
- Public, nonlisted REITs (PNLRs) are registered with the U.S. Securities and Exchange Commission (SEC) but are not traded on major securities exchanges like equity REITs or mREITs. PNLRs work similarly to equity REITs and generate funds from rental incomes. However, PNLRs face redemption limitations that can affect their liquidity. Generally, liquidity options are limited to share repurchase programs or secondary marketplace transactions.
- Private REITs are real estate funds or companies exempt from SEC registration. They don’t trade shares on the national stock exchange and can only be sold by brokers to institutional investors. Share redemptions vary by company and can be limited.
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You can invest in REITs individually, through an exchange-traded fund (ETF) or a mutual fund.
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Features to Look For in REIT Stocks
REITs are a way to add real estate into your investment portfolio without becoming a landlord or having to invest large sums of money in a property yourself. When deciding what REIT to invest in, keep an eye out for these key features.
1. Funds From Operations (FFO)
Since REITs invest in real estate, all of a REIT’s assets are depreciable. However, unlike traditional businesses, depreciation doesn’t cost REITs anything — in fact, just the opposite. The value of real estate tends to go up over time.
FFO refers to a REIT’s cash flow from operations and is calculated by adding depreciation and amortization to earnings then subtracting gains on sales. By adding depreciation expenses, a FFO provides a clearer picture of how much money a REIT makes. Many investors view FFO as the most important REIT-specific metric to understand before investing in a REIT.
2. Free Cash Flow (FCF)
FCF refers to the cash left over after a company accounts for its cash outflows to support operations and pay capital expenditures. With FCF, companies can pay dividends, debts and interest to investors among other things.
FCF measures profitability by excluding noncash expenses and including changes in working capital. By including these changes, FCF can help investors determine whether a company is able to pay its expected dividends or interest.
3. Net Asset Value (NAV)
Real estate values are not always easy to determine, presenting a big challenge to REIT investors. Instead of relying on book value or earnings per share (EPS) to determine unit value, many REITs focus instead on net asset value (NAV).
NAV refers to the estimated market value of a REIT’s total assets minus the value of its liabilities. When NAV is divided by the number of common shares, it can be a useful reference point for determining a company’s valuation and share price.
Slow and Steady
Investing in a REIT as part of a long-term investment strategy can enhance your investment portfolio’s stability and earnings. When choosing a REIT, make sure you research the company to determine what percentage of its assets are invested in real estate or real estate holdings. A solid REIT holds a range of diverse assets in its portfolio in order to protect itself against downturns in the real estate market and provide slow but steady growth in the long term.
Frequently Asked Questions
Questions & Answers
REIT stands for Real Estate Investment Trust.