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. REITS report their funds from operations (FFO), a metric of earnings particular to REITS. Some big names within the sector include American Tower Corp. (AMT) and Public Storage (PSA). The real estate sector, as measured by the Real Estate Select Sector ETF (XLRE), has underperformed the S&P 500 over the past 12 months. XLRE posted a 12-month trailing total return of 20.8% versus the S&P's 25.7%. All figures are as of January 8, 2020.
Below, we'll take a look at the top three real estate stocks for best value, fastest earnings growth, and most momentum.
Best Value Real Estate Stocks
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.
|Best Value Real Estate Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E|
|Vornado Realty Trust (VNO)||66.06||12.6||4.2|
|Host Hotels & Resorts Inc. (HST)||17.52||12.3||11.3|
|Simon Property Group Inc. (SPG)||144.45||44.3||20.8|
- Vornado Realty Trust: Vornado Realty Trust is a REIT. The trust owns, manages, and leases properties primarily located in the New York City metropolitan area. On October 28, 2019, Vornado Realty announced Q3 2019 results, including just under $323 million in net income attributable to common shareholders, up from $190.6 million in Q3 2018.
- Host Hotels & Resorts Inc.: Host Hotels & Resorts operates as a REIT engaged in the management of luxury and upper-upscale hotels.
- Simon Property Group Inc.: A REIT, Simon Property Group owns, develops, and manages primarily retail properties including malls and outlet centers. In the face of growing competition from online retail, Simon Property recently published a study indicating that in-store shopping may be 60% better for the environment than online shopping.
Fastest Growing Real Estate Stocks
Here are the real estate stocks in the S&P 500 with the highest year-over-year earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Real Estate Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Welltower Inc. (WELL)||82.25||33.4||752.9|
|Duke Realty Corp. (DRE)||34.40||12.6||313.3|
|Crown Castle International Corp. (CCI)||138.87||57.7||75.76|
- Welltower Inc.: Welltower operates as a REIT that invests in senior housing and healthcare real estate properties. Last quarter, Welltower announced it would acquire a building of 29 Class-A medical office properties for $787 million.
- Duke Realty Corp.: With properties in the southeastern, midwestern, and southern U.S., Duke Realty is focused on industrial and office spaces primarily. The company owns and operates roughly 155 million square feet of rentable space across its industrial properties.
- Crown Castle International Corp.: Crown Castle International is a REIT that owns, operates, and leases towers and other infrastructure for wireless communications. In Q3 2019, Crown Castle announced an increase to its annualized common stock dividend by 7% to $4.80 per share.
Real Estate Stocks with the Most Momentum
These are the real estate stocks in the S&P 500 that had the greatest price change over the past 12 months.
|Real Estate Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Price Change (%)|
|Equinix Inc. (EQIX)||581.88||49.6||60.8|
|CBRE Group Inc. (CBRE)||60.62||20.3||46.7|
|Prologis Inc. (PLD)||88.47||55.9||45.3|
|S&P 500 (SPY)||N/A||N/A||25.7|
|Real Estate Select Sector SPDR (XLRE)||N/A||N/A||20.8|
- Equinix Inc.: Equinix operates as a REIT engaged in the provision of 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. The company announced a YOY increase in quarterly revenue of 9% in Q3 2019 to $1.4 billion.
- CBRE Group Inc.: CBRE Group is a provider of real estate and investment services, including landlord advisory, asset management, finance, real estate investment banking, and project management services. The company recently announced new assignments for several of its key leaders, effective at the beginning of 2020.
- Prologis Inc.: Prologis operates a REIT that owns, operates, and develops industrial real estate properties worldwide. The company also leases modern distribution facilities to manufacturers, retailers, transportation companies, third-party logistics providers, and other enterprises.
Vornado Realty Trust. "Vornado Announces Third Quarter 2019 Financial Results," Accessed Jan. 8, 2020.
Simon Property Group, Inc. "New Study Reveals In-Store Shopping is up to 60 Percent More Favorable for the Environment than Online Shopping," Accessed Jan. 8, 2020.
Welltower Inc. "Welltower Expands Outpatient Medical Platform Through Acquisition of Hammes and 4 Other Transactions of Class-A Properties, Totaling $1.7 Billion," Accessed Jan. 8, 2020.
Duke Realty Corp. "Investor Relations," Accessed Jan. 8, 2020.
Crown Castle International Corp. "Crown Castle Reports Third Quarter 2019 Results, Provides Outlook For Full Year 2020 And Announces 7% Increase to Common Stock Dividend," Page 1. Accessed Jan. 8, 2020.
Equinix Inc. "Third Quarter 2019 Press Release," Page 1. Accessed Jan. 8, 2020.
CBRE Group, Inc. "CBRE Announces New Assignments for Key Senior Executives," Accessed Jan. 8, 2020.