With the proverbial “blood in the streets” in the second half of 2022, many investors have decided the time may be right to buy some real estate investment trust (REIT) stocks for long-term performance. But in choosing a REIT, should they look for high growth or search for solid income?
What if investors could have both? Here is a good place to start — three REITs with the highest total return over the past three years:
Inventrust Properties Corp. (NYSE:IVT) is an Illinois-based retail REIT, founded in 2004, that invests in grocery-anchored, open-air strip malls in eight states from Maryland to California. According to its website, Inventrust Properties looks for top grocers in Sun Belt markets with favorable wage and population growth.
Inventrust Properties has a total return over the past three years of 55.21%. Appreciation accounted for 48%, and the rest from the dividend. The main reason for that huge return is that privately owned Inventrust Properties became a public company in October 2021, and the stock jumped on the news.
While most of the appreciation occurred at that time, Inventrust Properties has still performed significantly better than most REITs in 2022. The 52-week range is $20.82 to $32.93, and the most recent price was near $24. The annual dividend of 82 cents yields 3.4% and has grown 13.8% since 2019.
Life Storage Inc. (NYSE:LSI) is a self-storage REIT, based in Buffalo, New York. It owns and manages over 1,100 facilities across 36 states and Ontario, Canada.
Life Storage has a total three-year return of 54.82%. Revenue is up 37% during that time. Although earnings per share (EPS) of $151.57 million was down in 2020 from the previous year, it has come back nicely since then with $249.32 million in 2021 and $165.84 million through the first two quarters of 2022.
About 41% of the total return stems from price appreciation and the remainder from the dividend, which has been raised five times since 2019 for an increase of 63%. The current annual dividend of $4.32 yields 4.2%.
BRT Apartments Corp. (NYSE:BRT) is a Great Neck, New York-based residential REIT that owns and operates 31 multifamily properties across 11 states, mostly in Texas and the Southeast region.
Over the past three years, BRT Apartments has returned a total of 53.31%, with a 28.1% return from appreciation and the rest from the dividends paid. The quarterly dividend of 25 cents has risen 13.6% since 2019.
With rents soaring over the past few years, BRT Apartments has thrived, as shown by its recent second-quarter earnings report. Revenue almost doubled from the previous quarter and EPS more than tripled from the first quarter. Funds from operation in the second quarter of 2022 was 37 cents per share, easily covering the dividend. The current annual dividend of $1 per share yields 4.6%.
While there’s no guarantee of future performance, and investors should perform their due diligence before buying any stock, it should be noted that both Life Storage and BRT Apartments are not just the highest achievers within the last three years but are among the top REITs over the past five years as well. That’s a pretty impressive track record.
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