When it comes to investing in stocks, historical performance over several years can often provide a glimpse into the future prospects of a company.
While there’s no guarantee the company will continue performing in the same manner, it’s far more likely that a profitable company will remain a winner over the next five years than one that has negative earnings per share (EPS).
For real estate investment trust (REIT) stocks, total returns include appreciation and dividend payments. While some investors prioritize dividend income over appreciation, total return also provides information on the safety and possible growth of the dividend. Therefore, total return should be on every investor’s mind when considering a REIT purchase.
The following three REITs have the highest total returns, including appreciation and dividends over the last five years. They performed well in the past and continue to outperform other REITs in recent times. Investors should consider these a starting point in their search for well-performing REITs:
BRT Apartments Corp. (NYSE:BRT) is a REIT that owns, operates and develops multifamily properties across 11 states. Most of its 31 properties are in the Southeast and Texas. While certainly not the largest company of its kind, its performance over the last five years has been nothing short of phenomenal.
From September 2017 to present, the stock has appreciated from $7.84 to $23.94. During this time, it’s also paid out $4.26 in dividends. If you bought 100 shares five years ago for $784, your total return would now be $3,178 or 405% over five years.
The company continues to thrive, as shown by its recent second-quarter earnings report. Revenue and earnings per share were higher, and adjusted funds from operation (AFFO) from the second quarter of 2022 was 37 cents per share, easily covering the 25-cent quarterly dividend payment. The current dividend yield of 4.1% has room to grow going forward.
Related: Private Market Multifamily Investment Offering Projecteding a 15% to 17% Annualized Return
Life Storage Inc. (NYSE:LSI) is a Buffalo, New York-based REIT that acquires and manages self-storage facilities in 36 states and Ontario, Canada. The company, which owns more than 1,100 storage facilities, has more than 2,200 employees.
Consumers today have quite a lot of stuff to store, and as a result this company has risen from $49.22 to $129.18 over the past five years. In addition, investors have received $15.01 in dividends for a total gain of $94.97 for each share owned. That works out to a 193% gain in five years.
The last four quarters have been quite strong for revenue and EPS growth, and the company recently raised its quarterly dividend to $1.08 from $1. The current annual dividend yield is about 3.4%.
Extra Space Storage Inc. (NYSE:EXR) is another self-storage company that operates out of Salt Lake City, Utah. Extra Space owns and operates over 1,900 units across 40 states, Washington, D.C., and Puerto Rico.
Extra Storage stock was $77.72 five years ago. Recently, the stock was trading near $202, for a gain of $124. Investors have also reaped $19.58 in dividends during that time, for a total of $144 per share or 184% in total return.
Extra Storage continues to perform well for investors. It has beaten the street’s estimates the last four quarters with rising revenue and EPS. With a 3% dividend it’s difficult to find anything not to like about this solid five-year performer.
Share prices as of September 2, 2022.
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