Real estate investment trusts (REITs) are becoming increasingly popular among investors, as economists predict that the Federal Reserve will soon reduce interest rates. This rate-sensitive sector stands to benefit from lower re-financing costs and a potential increase in the value of underlying properties. REITs also typically offer decent and regular dividends, with some offering yields of 3% or more. This list includes REITs that invest in healthcare, retail, mortgages, and industrial assets.
National Health Investors is a REIT that manages 194 properties in 33 states, in partnership with 30 operating partners. The portfolio includes senior housing centers, skilled nursing sites, hospitals, and shopping centers. The company has a market capitalization of $2.73 billion, a price-earnings ratio of 20, and a debt-to-equity ratio of .91. National Health Investors pays a dividend of 7.16% and has recently reached a new high in its daily price chart.
Site Centers owns open-air retail properties in suburban areas of major U.S. cities. With a market cap of $3.07 billion, the REIT trades at 1.53 times book with a price-earnings ratio of 12. Site Centers offers a dividend of 3.55% and has assets such as the Ahwatukee Foothills Towne Center in Phoenix, Arizona, and Nassau Park Pavilion in Princeton, New Jersey. Despite a 92% decrease in earnings this year, the REIT has seen a 22% increase over the past five years.
Terreno Realty owns and operates industrial retail facilities in major U.S. coastal markets. With a market capitalization of $5.99 billion, the REIT has a price-earnings ratio of 37 and trades at 1.99 times book. Terreno Realty pays a dividend of 3.24% and has seen a 30% decrease in earnings this year, though there has been a 10% increase over the past five years. The company manages 259 buildings totaling 16 million square feet and has reached a new high in its daily price chart.
TPG RE Finance Trust is a balance sheet lender that originates first-mortgage loans greater than $50 million in U.S. markets. With a market capitalization of $601 million, the REIT has a forward price-earnings ratio of 7.52 and trades at 53% of its book value. TPG RE Finance Trust pays a high dividend of 15.54% and has a debt-to-equity ratio of 2.70. The company’s portfolio includes multi-family and industrial properties and has a short float of 5.37%.
Overall, REITs are gaining favor among investors as expectations for lower interest rates drive interest in rate-sensitive sectors. These four REITs offer investors attractive yields and a diverse range of investment opportunities in healthcare, retail, industrial, and mortgage assets. Despite fluctuations in earnings, all four REITs have seen growth in their dividend payments and are trading at attractive valuations relative to their book values and market capitalizations. As the market continues to evolve, REITs may offer investors opportunities for stable income and potential growth.
