When choosing among stocks in the same sector, investors often compare fundamentals like price-to-earnings ratios (P/E) or earnings per share (EPS), balance sheets and other metrics.
But it’s also important for investors to compare the relative strength of a stock versus its peers in that sector. In other words, investors also want to consider the stocks that are recently outperforming other similar stocks, because these are the stocks that institutions are buying and will usually continue to perform well.
This past week saw a two-day rally to begin October after a prolonged slump for real estate investment trust (REIT) stocks in September. Using the parameters of REITs priced at $7 or higher and with a minimum 3.5% dividend yield, here are three REITs that fared the best over the five-day period from Sept. 28 through Oct. 4.
Although some rough times could still be ahead, investors may want to consider locking in these high-dividend yields before these REITs see a major price jump.
Macerich Co. MAC is a Santa Monica, California-based retail REIT that specializes in the acquisition, leasing and management of malls. It operates 44 regional malls all across the U.S.
The 52-week price range is $7.40 to $22.88. From Sept. 28 through Oct. 4, Macerich was up 6.87%, perhaps an indication of more appreciation to follow.
The annual dividend of 60 cents per share yields 7.1%. Macerich cut its dividend drastically in early 2020 when the COVID-19 pandemic took hold but has paid a consistent quarterly dividend of 15 cents since then. The funds from operation (FFO) of $1.63 is more than sufficient for the payout, and there is plenty of room for dividend growth.
Uniti Group Inc. UNIT is a Little Rock, Arkansas-based REIT that acquires and constructs mission-critical communications infrastructure in the form of fiber optics. Uniti Group owns and operates 129,000 fiber route miles covering 270,000 buildings in the U.S.
Uniti Group’s 52-week price range was $6.66 to $14.60, with the low coming during the last week of September. However, in the recent five-day period, Uniti rebounded strongly to move higher by 10.9%.
The 60-cent annual dividend has grown 150% over the past five years, and with the 45% sell-off in the stock price since March, the yield has now grown to 8.2%. It seems as if traders are trying to put in a bottom on Uniti Group stock, and better times may be ahead for this REIT.
Tanger Factory Outlet Centers Inc. SKT is a Greensboro, North Carolina-based REIT that owns and manages 38 open-air upscale outlet malls across 20 states and in Canada. It leases to over 500 well-known companies, including Saks Fifth Avenue, Coach New York, Vera Bradley Designs Inc. and Kate Spade New York.
Tanger Factory Outlet Centers cut its dividend from $0.358 to $0.178 in January 2021 but has since raised the dividend twice. Its 80-cent annual dividend now yields 5.4%. The FFO is $1.47 per share, so there is plenty of room for future dividend raises.
The 52-week range is $13.26 to $22.51, with the stock touching its low only a week ago. However, Tanger Factory Outlet Centers was up a solid 7.28% during the recent five-day period and could be poised for a solid rebound after losing 32% since last November.
Today's Private Market Insights:
RAD Diversified's RAD REIT has declared an 8% dividend yield. The REIT has averaged 27% annual gains since its inception.
QC Capital launched its latest real estate fund with a target annualized return of 15% to 19%
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