2 Premier REITs Now At Bargain Prices

seekingalpha04-26

Investors have the opportunity to be selective in the current market, especially when it comes to discounted REITs.Rexford Industrial is a well-run owner of industrial properties in supply-constrained...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n2 Premier REITs Now At Bargain Prices\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-26 02:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4685973-2-premier-reits-now-bargain-prices><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Investors have the opportunity to be selective in the current market, especially when it comes to discounted REITs.Rexford Industrial is a well-run owner of industrial properties in supply-constrained...</p>\n\n<a href=\"https://seekingalpha.com/article/4685973-2-premier-reits-now-bargain-prices\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"FR","symbol_name":"第一工业地产","start_time":0,"source_url":"https://seekingalpha.com/article/4685973-2-premier-reits-now-bargain-prices","article_id":"2430237215","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1248262649/image_1248262649.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2430237215","pubTimestamp":1714068000,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Investors have the opportunity to be selective in the current market, especially when it comes to discounted REITs.Rexford Industrial is a well-run owner of industrial properties in supply-constrained Southern California, offering strong growth potential.American Tower is the largest cell-tower REIT with international presence, offering long-term growth potential and a decent dividend yield.   JuSun Buying above average stocks at below average valuations can be a winning strategy. In fact, that's a key reason for how Joel Greenblatt's \"magic formula\" of investing has been successful. Greenblatt is an American hedge fund manager who championed the strategy of buying stocks with below average PE and high returns on invested capital. When these two forces work in tandem, and combined with a decent starting dividend yield, the investor can see potentially strong returns over the long run. This brings me to the following 2 picks, which have been beaten down in price over the past 12 months,","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"FR":"第一工业地产","LU0708994859.HKD":"TEMPLETON GLOBAL \"A\" (HKD) ACC","TMUS":"T-Mobile US Inc","BK4581":"高盛持仓","LU0127658192.USD":"EASTSPRING INVESTMENTS GLOBAL TECHNOLOGY \"A\" (USD) ACC","BK4549":"软银资本持仓","LU1585245621.USD":"EASTSPRING INV GLOBAL LOW VOLATILITY EQUITY FUND \"A\" (USD) ACC B","LU0029864427.USD":"TEMPLETON GLOBAL \"A\" (USD) INC","LU2098885051.SGD":"JPMorgan Funds - Multi-Manager Alternatives A (acc) SGD","CCI":"冠城","IE00B775SV38.USD":"NEUBERGER BERMAN US MULTICAP OPPORTUNITIES \"A\" (USD) ACC","BK4554":"元宇宙及AR概念","LU0642271901.SGD":"Janus Henderson Horizon Global Technology Leaders A2 SGD-H","BK4515":"5G概念","GB00BDT5M118.USD":"天利环球扩展Alpha基金A Acc","LU0098860793.USD":"FRANKLIN INCOME \"A\" INC","LU0208291251.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) INC","BK7007":"医疗保健设备","BK4567":"ESG概念","CFA.SI":"NikkoAM-STC Asia REIT","BK4507":"流媒体概念","BK4534":"瑞士信贷持仓","LU0310800379.SGD":"FTIF - Templeton Global A Acc SGD","LU1280957306.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQUITIES \"AUP\" (USD) INC","LU1914381329.SGD":"Allianz Best Styles Global Equity Cl ET Acc H2-SGD","LU0321505439.SGD":"Schroder ISF Global Dividend Maximiser A Acc SGD","IE00BSNM7G36.USD":"NEUBERGER BERMAN SYSTEMATIC GLOBAL SUSTAINABLE VALUE \"A\" (USD) ACC","LU1064131342.USD":"Fullerton Lux Funds - Global Absolute Alpha A Acc USD","CFA":"VictoryShares US 500 Volatility Wtd ETF","LU0320765646.SGD":"FTIF - Franklin Income A MDIS SGD-H1","STAG":"STAG Industrial","VZ":"威瑞森","LU2264538146.SGD":"Fullerton Lux Funds - Global Absolute Alpha A Acc SGD","AMT":"美国电塔","AMT.AU":"ALLEGRA MEDICAL TECHNOLOGIES","LU1621767737.EUR":"AZ EQUITY GLOBAL INFRASTRUCTURE \"AAZ\" (EUR) ACC","LU2384288077.EUR":"AZ EQUITY GLOBAL INFRASTRUCTURE \"A-INS\" (EUR) ACC","TRNO":"Terreno Realty","BK4588":"碎股","LU1066051498.USD":"HSBC GIF GLOBAL EQUITY VOLATILITY FOCUSED \"AM2\" (USD) INC","LU1430594728.SGD":"Eastspring Investments - Global Low Volatility Equity AS SGD","T":"美国电话电报","LU1621768206.USD":"AZ EQUITY GLOBAL INFRASTRUCTURE \"AAZ\" (USD) ACC","LU1066053197.SGD":"HSBC GIF GLOBAL EQUITY VOLATILITY FOCUSED \"AM3\" (SGDHDG) INC","EGP":"EastGroup Properties Inc","BK4115":"综合电信业务","PLD":"安博","LU0276348264.USD":"THREADNEEDLE (LUX) GLOBAL DYNAMIC REAL RETURN\"AUP\" (USD) INC","LU0786609619.USD":"高盛全球千禧一代股票组合Acc","REXR":"Rexford Industrial Realty Inc"},"translate_title":"2卓越房地产投资信讬现以低价出售","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AMT.AU":1,"VZ":1,"TRNO":1,"TMUS":1,"T":1,"STAG":1,"REXR":1,"PLD":1,"FR":1,"EGP":1,"CFA.SI":1,"CFA":1,"AMT":1,"CCI":1},"content_text":"Investors have the opportunity to be selective in the current market, especially when it comes to discounted REITs.Rexford Industrial is a well-run owner of industrial properties in supply-constrained Southern California, offering strong growth potential.American Tower is the largest cell-tower REIT with international presence, offering long-term growth potential and a decent dividend yield.   JuSun Buying above average stocks at below average valuations can be a winning strategy. In fact, that's a key reason for how Joel Greenblatt's \"magic formula\" of investing has been successful. Greenblatt is an American hedge fund manager who championed the strategy of buying stocks with below average PE and high returns on invested capital. When these two forces work in tandem, and combined with a decent starting dividend yield, the investor can see potentially strong returns over the long run. This brings me to the following 2 picks, which have been beaten down in price over the past 12 months, creating an opportunity for enterprising investors to take advantage of asset mispricing while collecting strong starting yields, so let’s get started! #1: Rexford Industrial Rexford Industrial (REXR) is well-known in REIT circles for being a well-run owner of industrial properties in supply constrained Southern California market of Los Angeles. Unlike peers like Prologis (PLD) and Terreno Realty (TRNO), REXR is focused just the one aforementioned region where an imbalance between supply and demand translates into pricing power. Southern California is an attractive place to be for REXR not just for its population density, but also for its status as a major port city, which processes 30% of total U.S. port volume. Over the past 12 months, the Los Angeles and Long Beach ports saw 32% increase in port volume, comparing favorably to the 9% growth on the U.S. East Coast. In REXR’s most recent reported quarter (Q1’24) released on April 17th, REXR saw 11.5% YoY Core FFO per share growth and 14.9% YoY Portfolio NOI growth. It also carries strong portfolio occupancy of 97%. REXR’s strong bottom line growth was driven by another quarter of strong leasing spreads on new and renewal leases. As shown below, REXR saw 53% lease spread in Q1’24 and over the past 3 years, this metric has outperformed that of the peer average, which includes PLD, EastGroup Properties (EGP), First Industrial (FR), and STAG Industrial (STAG), as TRNO does not report leasing spreads. Investor Presentation Management is guiding for 7.5% (at the midpoint) Same Property Cash NOI growth this year, which is in-line with its previous guidance post Q4’23 results. Also encouraging, Core FFO per share guidance has been raised to $2.33 at the midpoint, up from $2.29, previously. This would represent 6.4% growth from Core FFO/share of $2.19 in 2023. This is to be driven by both internal rental growth and external development pipeline. As shown below, investments and pipeline are expected to drive an additional $0.51 per share in Core FFO per share by 2029. Investor Presentation REXR currently yields a respectable 3.9% and the dividend is well-covered by a 70% payout ratio. It has a 5-year dividend CAGR of 18.6% and raised its dividend by 10% this year. REXR is currently yielding well above its historical norms, and this is driven by the material share price weakness over the past year. As shown below, REXR stock currently sits near its 52-week low and is down by 23% over the past 12 months. YCharts I view REXR as being an even better buy at the current price of $42.54 with a forward P/FFO of 18.0, comparing favorably to the 21.3x P/FFO from when I last visited the stock, and below the historical 28.3x P/FFO, as shown below. FAST Graphs Risks to REXR include slowing growth and macroeconomic factors such as inflationary pressures, as these are reflected by lower cash lease spreads so far this year compared to prior years. Also, higher interest rates put downward pressure on the REIT as it raises its cost of debt. I believe these risks are more than priced into the stock and my ‘Buy’ thesis remains unchanged. With a near-4% yield and my reasonable expectations for a 6-9% FFO/share forward growth rate in the near term, as REXR navigates the current higher interest rate environment, it could still deliver at least market-level performance for investors. #2: American Tower American Tower (AMT) is the largest cell-tower REIT on the market today. It’s also the only one with international presence outside the U.S., with a total portfolio of over 224,000 communications sites and a highly interconnected footprint of U.S. data center facilities. AMT has seen a material downturn in its share price in recent months. As shown below, it’s followed around the same trajectory as peer Crown Castle (CCI) over the past 12 months, with the share price now sitting close to its 52-week low reached last October, and down 15% over the trailing 12 months. AMT and CCI 1-Yr Price Trend (YCharts) One of the reasons behind the weakness in price has to do with slowing growth as AMT’s telecom tenants like Verizon (VZ), AT&T (T) and T-Mobile (TMUS) have pulled back on capital spending over the past 12+ months, opting instead to strengthen their balance sheets and boost free cash flow. This is reflected by AMT’s Q4’23 adjusted EBITDA rising by 3.2% YoY compared to 6.7% growth for the full year 2023. Despite the slowdown in spending by its tenants, AMT still executed well, with full-year adjusted EBITDA growth of 7.5% on an FX-neutral basis, outpacing the 6.8% FX-neutral Property Revenue growth, as shown below, implying healthy operating leverage at the company. Investor Presentation Management is guiding for 2.5% FX-neutral adjusted EBITDA growth (less than 1% growth including FX) this year, as the continuation of lower than historical capital spending by tenants and a strong U.S. dollar serve as headwinds. However, a reduction in maintenance capital spending is expected to boost AMT’s AFFO per share. As shown below, AFFO per share is expected to grow by 6.5% on an FX-neutral basis (5% including FX) this year. Investor Presentation Importantly, AMT maintains a strong balance sheet, with a net debt-to-EBITDA ratio of 5.2x at the end of 2023, representing a 0.2x reduction from the prior year period. It also reduced its exposure to floating rate debt from 22% to 11% over the same time period. AMT recently reduced its quarterly dividend rate from $1.70 in Q4’23 to $1.62 in Q1’24, bringing the rate back down to where it was in Q3’23. While this is a quarter-on-quarter cut, AMT would still be able to maintain a track record of dividend growth should it be able to maintain at least the same $1.62 payout for the 3 remaining payments this year. I believe this is well-within reach, as the current forward rate equates to an AFFO payout ratio of 63% based on the 2024 outlook for $10.33 in AFFO/share. Risks to AMT include potential for macroeconomic risks as it relates to increased price sensitivity among wireless customers, which could in turn delay capital spending plans by AMT’s telecom tenants. In addition, AMT recently exited certain geographic regions like India, which could result in near-term dilution risk as it seeks to deploy capital elsewhere. Lastly, I see AMT as being a compelling value play at the current price of $173.35 with a forward P/FFO of just 16.7, sitting below the 19.2x P/FFO from when I last visited the stock and below its historical P/FFO of 23x, as shown below. FAST Graphs My ‘Buy’ thesis remains unchanged from last time, as I believe the value proposition behind AMT remains predicated on future growth in the telecommunications industry. This should be buffeted by potential new use cases for 5G networks as well as increased AI workload demands on data centers, to which AMT has exposure due to its CoreSite acquisition. With a 3.7% dividend yield and my expectations of a resumption to high single digit FFO/share growth after near-term headwinds are sorted out, AMT could deliver market-beating returns from here. Investor Takeaway  I hope you enjoyed this piece about REXR and AMT, which are 2 undervalued REITs with above-average growth potential and respectable dividend yields. While both are down due to perceived headwinds in their respective industries, I believe these issues will come to pass and investors who layer in at the current discounted prices may be able to reap the rewards down the road through potential for higher dividends and long-term capital appreciation through growth and normalization to each stock’s mean valuation.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2430237215"}