Top REITs for March 2022

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Real estate investment trusts (REITs) are publicly traded companies that allow individual investors to buy shares in real estate portfolios that receive income from a variety of properties. They allow investors to invest easily in the real estate sector, which includes companies that own, develop, and manage residential, commercial, and industrial properties.

Among other requirements, REITs are required to pay out at least 90% of their taxable income as dividends. 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., Crown Castle International Corp., and Prologis Inc.

The COVID-19 pandemic has significantly disrupted the commercial real estate industry, as workers around the world have adapted to working from home and various lockdown measures have been enacted. Despite the economy’s rebound, the industry’s recovery has been uneven: the corporate office sector generally has performed worse than residential real estate and apartments. Consumers, too, have been disrupted. For example, workers who are returning to cities to live and work are now encountering soaring prices for privately owned apartments and commercial apartments—prices that are dramatically higher than when they left.

REITs, as represented by an exchange-traded fund (ETF)—the Real Estate Select Sector SPDR Fund (XLRE)—have solidly outperformed the broader market. XLRE’s 19.4% total return over the past 12 months exceeded the benchmark Russell 1000 index, which has provided a total return of 8.1%. These market performance numbers and the statistics in the tables below are as of Feb. 25, 2022.

Here are the top three REITs with the best value, fastest growth, and most momentum.

These are the REITs 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 that you’re paying less for each dollar of profit generated.

Best Value REITs
  Price ($) Market Cap ($B) 12-Month Trailing P/E Ratio
Annaly Capital Management Inc. (NLY) 6.95 10.2 4.3
New Residential Investment Corp. (NRZ) 10.27 4.8 6.7
AGNC Investment Corp. (AGNC) 12.93 6.8 10.9

Source: YCharts

  • Annaly Capital Management Inc.: Annaly Capital Management invests in real estate and related assets, including agency mortgage-backed securities (MBS), residential and commercial real estate, and middle-market lending. The company’s net income available to common stockholders plunged by more than 21% (YOY) in Q4 2021, ended Dec. 31, 2021. During the quarter, Annaly said its capital allocation to its credit businesses rose, driven by $2 billion in credit originations. The company did not provide comments on the cause of its declining net income.
  • New Residential Investment Corp.: New Residential Investment is a public REIT investing in the residential housing sector. The company’s portfolio includes mortgage servicing-related assets, residential loans, non-agency securities, and similar investments. It also owns a mortgage originator and servicer.
  • AGNC Investment Corp.: AGNC Investment invests mainly in residential MBS on a leveraged basis through collateralized borrowings. It uses an active portfolio management strategy to provide risk-adjusted returns. On Feb. 10, the company declared a monthly cash dividend of $0.12 per common share for February 2022. The dividend is payable on March 9 to common stockholders of record as of Feb. 28, 2022.

These are the top REITs as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.

Fastest Growing REITs
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
Boston Properties Inc. (BXP) 120.01 18.8 2,260 9.9
Digital Realty Trust Inc. (DLR) 134.34 38.2 2,220 4.6
New Residential Investment Corp. (NRZ) 10.27 4.8 106.2 119.2

Source: YCharts

  • Boston Properties Inc.: Boston Properties is a major developer, owner, and manager of Class A office properties in Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, DC. The company reported results for Q4 2021 on Jan., 25 2022. Net income available to the company’s shareholders rose to $184.5 million from $7.3 million a year earlier as revenue rose about 10%. Financial results for the quarter were impacted by net cash proceeds of approximately $179.9 million for the sale of a three-building property in Lexington, MA.
  • Digital Realty Trust Inc.: Digital Realty Trust is a real estate investment trust (REIT) that owns, acquires, and manages technology-related properties. The company focuses on data center, colocation and interconnection-related properties. Digital Realty Trust’s net income climbed more than 18-fold in Q4 2021, ended Dec. 31 even despite a small gain in total operating revenue year-over-year (YOY). The strong performance was driven in part by record bookings for the quarter, part of $500 million in new business generated worldwide for all of 2021.
  • New Residential Investment Corp.: See company description above.

These are the REITs that had the highest total return over the last 12 months.

REITs with the Most Momentum
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Camden Property Trust (CPT) 162.94 16.9 56.3
Life Storage Inc. (LSI) 126.75 10.4 55.1
Extra Space Storage Inc. (EXR) 189.74 25.4 53.3
Russell 1000 N/A N/A 8.1
Real Estate Select Sector SPDR Fund (XLRE) N/A N/A 19.4

Source: YCharts

  • Camden Property Trust: Camden Property Trust owns and operates multifamily apartment communities across the U.S. On Feb. 3, the company declared a Q1 2022 dividend of $0.94 per common share. The dividend is payable on April 18 to shareholders of record as of March 31, 2022.
  • Life Storage Inc.: Life Storage owns and operates self-storage properties in dozens of U.S. states. The company operates over 1,000 storage facilities.
  • Extra Space Storage Inc.: Extra Space Storage is a self-storage management company that owns and operates facilities across the United States.

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