The real estate sector includes companies that own, develop, and manage residential, commercial, and industrial properties. Each of these three real estate segments includes publicly traded real estate investment trusts (REITs). REITs are vehicles that legally allow individual investors to buy shares in real estate portfolios that receive income from a variety of properties. A key REIT metric is funds from operations (FFO), a measure of earnings particular to the industry. Some big names within the sector include American Tower Corp. (AMT), Prologis Inc. (PLD), and Digital Realty Trust Inc. (DLR). Real estate stocks, as represented by the Real Estate Select Sector SPDR ETF (XLRE), have underperformed the broader market with a total return of -7.8% compared to the S&P 500's total return of 5.5% over the past 12 months. These market performance numbers and the statistics in the tables below are as of June 24.
Here are the top 3 real estate stocks with the best value, the fastest earnings growth, and the most momentum.
Best Value Real Estate Stocks
These are the real estate stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. 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.
|Best Value Real Estate Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Vornado Realty Trust (VNO)||39.15||7.5||2.6|
|Simon Property Group Inc. (SPG)||70.13||21.4||10.9|
|Host Hotels & Resorts Inc. (HST)||11.24||7.9||11.2|
- Vornado Realty Trust: Vornado Realty Trust is a REIT that owns office, retail, merchandise mart properties, and other related investments.
- Simon Property Group Inc.: Simon Property Group is a REIT that owns, develops, and manages retail real estate properties throughout the world. On June 10, the company announced that it had terminated its February 2020 merger agreement with shopping center owner Taubman Centers Inc. (TCO), citing the "uniquely material and disproportionate effect" of the COVID-19 pandemic on Taubman.
- Host Hotels & Resorts Inc.: A lodging REIT, Host Hotels & Resorts holds controlling interests in luxury resorts and hotels. The company focuses its holdings on properties in the U.S., Canada, Mexico, and Europe. On June 19, the company announced that it would suspend its Q2 dividend payment, originally slated for July, in an effort to preserve liquidity due to the COVID-19 pandemic. The company estimates this action could preserve about $140 million.
Fastest Growing Real Estate Stocks
These are the real estate stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Real Estate Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Boston Properties Inc. (BXP)||92.60||14.4||407.9|
|Healthpeak Properties Inc. (PEAK)||26.97||14.5||315.4|
|Ventas Inc. (VTR)||35.46||13.2||260.0|
- Boston Properties Inc.: Boston Properties operates as a REIT that owns, manages, and develops office properties primarily in Boston, Washington, D.C., Midtown Manhattan, and San Francisco.
- Healthpeak Properties Inc.: Healthpeak Properties operates as a REIT that invests in real estate properties related to health care, including senior housing, life sciences, medical offices, hospitals, and skilled nursing homes. On May 5, the company reported 2.0% growth in Total Same-Store Portfolio Cash Net Operating Income across all of its properties in Q1 2020.
- Ventas Inc.: Ventas operates as a REIT that owns seniors housing communities, skilled nursing facilities, hospitals, and medical office buildings in both the U.S. and Canada. On June 19, Ventas announced a Q2 2020 dividend of $0.45 per share, payable on July 14. This marks a payout reduction of 43.2% on a quarterly basis.
Real Estate Stocks with the Most Momentum
These are the real estate stocks that had the highest total return over the last 12 months.
|Real Estate Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Equinix Inc. (EQIX)||694.69||61.5||39.1|
|SBA Communications Corp. (SBAC)||293.78||32.8||27.5|
|Crown Castle International Corp. (CCI)||165.53||69.0||26.0|
|Real Estate Select Sector SPDR ETF (XLRE)||N/A||N/A||-7.8|
- Equinix Inc.: Equinix is a REIT that provides colocation space and related services. The company provides customers with access to a selection of business partners and solutions based on their colocation, interconnection, and managed IT service needs. On June 1, Equinix announced plans to significantly expand its operations in Canada, beginning with the purchase for $750 million of 13 Bell data centers located across the nation. The seller is BCE. Inc. (BCE).
- SBA Communications Corp.: SBA Communications owns and operates wireless communications infrastructure. SBA Communications leases antenna space to various wireless service providers.
- Crown Castle International Corp.: Crown Castle International is a REIT that owns, operates, and leases shared wireless infrastructure. The company operates and leases cell towers and a network of fiber-optic cables throughout the U.S. and Puerto Rico.
YCharts. "Financial Data," Accessed June 24, 2020.
Simon Property Group, Inc. "Simon Property Group Terminates Taubman Agreement," Accessed June 24, 2020.
Host Hotels & Resorts, Inc. "Host Hotels & Resorts Temporarily Suspends Quarterly Cash Dividend to Preserve Liquidity While Navigating the Business Impact of COVID-19," Accessed June 24, 2020.
Healthpeak Properties, Inc. "Healthpeak Properties™ Reports First Quarter 2020 Results," Accessed June 24, 2020.
Ventas, Inc. "Ventas Declares Second Quarter 2020 Dividend," Accessed June 24, 2020.
Equinix, Inc. "Equinix to Expand Canadian Operations with US$750 Million Acquisition of 13 Bell Data Center Sites," Accessed June 24, 2020.