The real estate sector includes companies that own, develop, and manage residential, commercial, and industrial real estate. Each of these three segments includes publicly traded real estate investment trusts (REITs), which are portfolios of properties that serve as gauges of industry trends for investors. Some examples of companies within the real estate sector include Rexford Industrial Reality Inc. (REXR), a REIT, and self-storage unit company Extra Space Storage Inc. (EXR). The Real Estate Select Sector ETF (XLRE) has outperformed the S&P 500 over the past 12 months, posting returns of 18.6% as compared with 16% for the S&P. All figures below are as of November 14, 2019.
We'll take a look at the top three real estate stocks as far as best value, fastest earnings growth, and most momentum.
Real Estate Stocks with the Best Value
Here are the real estate stocks in the S&P 500 with the lowest 12-month trailing price-to-earnings (P/E) ratio in the sector. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Real Estate Stocks with the Best Value|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E|
|Vornado Realty Trust (VNO)||64.87||12.4||4.1|
|Host Hotels & Resorts Inc. (HST)||16.85||12.1||10.8|
|CBRE Group Inc. (CBRE)||55.07||18.4||18.1|
- Vornado Realty Trust: Vornado Realty Trust is a REIT focused on commercial property in Manhattan. Vornado invests in both retail spaces as well as office buildings. In Q3 2019, Vornado reported a 69% increase in net income attributable to common shareholders per diluted share.
- Host Hotels & Resorts Inc.: With close to 100 upscale hotel properties in its portfolio, Host Hotels & Resorts is one of the most prominent hotel REITs in the real estate sector. In the most recent quarter, Host Hotels made progress on a major capital allocation project, selling $565 million in assets and repurchasing about $200 million of stock.
- CBRE Group Inc.: CBRE Group is a commercial real estate and investment firm. Unlike some other real estate companies on this list that primarily invest in property, CBRE both invests in property and caters to tenants, offering facilities and project management, leasing services, and more. In recent months, CBRE has acquired London-based residential properties developer Telford Homes, among other businesses.
Real Estate Stocks with the Fastest Earnings Growth
Here are the real estate stocks in the S&P 500 with the highest year-over-year earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Real Estate Stocks with the Fastest Earnings Growth|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Welltower Inc. (WELL)||83.1||33.7||574.1|
|Prologis Inc. (PLD)||87.9||55.6||53.8|
|Crown Castle International Corp. (CCI)||131.4||54.6||45.0|
- Welltower Inc.: Welltower is a REIT that's focused primarily on senior care facilities, assisted living properties, and medical office space. It also owns hospitals and other types of health care facilities in the U.S. and abroad. This company recently announced a massive expansion project involving the purchase of dozens of properties valued at a total of $1.7 billion.
- Prologis Inc.: An industrial REIT, Prologis invests in storage services and logistics facilities marketed to clients around the world. Prologis is also in the process of expanding, having recently announced a merger in which it will acquire Liberty Property Trust for about $12.6 billion.
- Crown Castle International Corp.: Crown Castle International is the largest real estate company providing communications infrastructure in the U.S. It owns about 40,000 cell phone towers and more than 75,000 route miles of fiber across the country. Based on strong Q3 2019 results, Crown Castle recently increased its annualized common stock dividend by 7%.
Real Estate Stocks with the Most Momentum
These are the real estate stocks in the S&P 500 that had the greatest total return over the past 12 months.
|Real Estate Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Equinix Inc. (EQIX)||540.73||46.1||43.2|
|Kimco Realty Corp. (KIM)||21.05||8.9||38.9|
|Mid-America Apartment Communities Inc. (MAA)||134.65||15.4||37.1|
|S&P 500 (SPY)||--||--||16.0|
|Real Estate Select Sector SPDR (XLRE)||--||--||18.6|
- Equinix Inc.: Equinix is a real estate company that invests in data centers and other Internet-related properties. It has roughly 200 data centers in its portfolio, spanning about two dozen countries around the globe. Its latest data center is scheduled to open in Q1 2020 in Warsaw, Poland.
- Kimco Realty Corp.: A REIT with about 74 million square feet of leasable property in its portfolio, Kimco Realty invests in shopping centers around the U.S. In Q3 2019, Kimco saw pro-rata occupancy rates of 96.4%, an all-time high for the company.
- Mid-America Apartment Communities Inc.: With properties in the southern U.S., Mid-America Apartment Communities is a REIT that owns more than 300 apartment communities totaling close to 100,000 individual units. The company also owns a smaller number of office buildings. The firm saw its same store portfolio grow net operating income by 4.5% in Q3 2019.