Buying up physical property can be a costly endeavor for an average person, which is why many people turn to funds that offer easier investments in real-estate markets. As a quick example of the power of real estate, the Select Sector SPDR Fund (XLRE) has tripled the return of the S&P 500 over the past 12 months.
For market participants, Real estate investment trusts (REITs) blend the world of stocks with that of funds, or trusts in this case. A select group of REITs pay monthly dividends to their shareholders, making them an attractive investment for passive income investors.
Besides a solid REIT in Realty Income (NYSE: O), whose price recently bottomed, and which provides an impressive dividend, Finbold identified two REITs that can help investors have peace of mind when it comes to investing.
Medical Property Trust (NYSE: MPW)
On February 17, MPW announced that they will be raising their quarterly dividend by 3.6% to $0.29 per share. This comes as great news since the company raised its dividend for 9 consecutive years.
What’s more, the company posted in-line Q1 2022 results earning $0.47 per share (EPS), though expenses have had an increase of 0.96%, which can be attributed to their constant acquisition moves. For 2022 the company is focusing on acquiring another $1-3 billion in opportune assets in the medical real estate space.
Shares have recently hit a 52-week low, which could represent a nice entry position for investors. Though the price is currently under all daily Simple Moving Averages (SMAs) no significant volume increases have been noted in the last couple of sessions, which could indicate that shares are trying to find their bottom.
With analysts the company is a bit of a mixed bag, the general consensus is a moderate buy. The average next 12 months price they give the shares is $22.27 or 26.82% higher than the current price of $17.56. Looking at the price predictions it seems that anything around $20 could be considered a fair value for the company shares.
Federal Realty Investment Trust (NYSE: FRT)
FRT has a unique selling proposition for investors and that is a robust 3.6% yield with potential upside, which they have raised for 54 years consecutively. Their portfolio contains roughly 25 million square feet of rental space dispersed across the U.S.
They beat Q1 2022 earnings forecasts on May 5, and to top it off they have over $1.3 billion of total available liquidity, which offers them a fortress-like balance sheet. Earnings grew 17.7% year-on-year and the earnings were concluded by declaring a $1.07 quarterly dividend, which is in line with the previous one.
Despite the strong balance sheet and numerous prospects the company has, investors seemingly got spooked and punished the stock in 2022. After the late January drop the shares haven’t recovered, falling below all daily SMAs in the last few trading sessions. Trading volumes have increased so there might be more volatility in the near term.
Similarly to the previous stock, analysts are mixed on the stock with the general consensus being a moderate buy. For the next 12 months, the average price per analyst should be at $134.45, which is 22.70% higher than the current share price of $109.58.
Despite whipsaws seen in the market in 2022 investing in companies with strong balance sheets should put investors’ minds at ease. Increasing dividends, cash on hand, strong and growing portfolio of assets should do well in almost any market environment.
Investors worried that there might be more volatility in prices, can sit on the sidelines for a while; however, staying there too long can lead to missed opportunities. Thus, these two REITs are worth putting on any income investors’ watchlists.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.