Top-performing Real Estate Investment Trusts (REITs) include Gaming and Leisure Properties, Inc. (GLPI), Ladder Capital Corp (LADR), and Whitestone REIT (WSR), which exhibit robust prospects despite the broader market uncertainties.
REITs own and often operate income-producing real estate, such as apartments, warehouses, self-storage facilities, malls, and hotels, with a track record for paying stable dividends. A mandate to pay a minimum of 90% of their taxable income as dividends make them reliable and attractive to long-term income investors.
This financial vehicle also offers diverse opportunities as individual REITs specialize in multiple areas of the real estate industry. As a result, when the rest of the market sways due to myriad uncertainties, such diversity may command a safe harbor for you.
According to recent data from S&P Global Market Intelligence, that analyzed the financial results for 121 U.S. REITs, 66 of which reported FFO per share higher than consensus estimates for the last three months of 2022, while 20 REITs in this analysis reported FFO per share at par to estimates.
Furthermore, according to a Technavio report, the global REIT market is projected to increase by $333.01 billion between 2022 and 2027. The market's growth momentum is estimated to accelerate at a CAGR of 2.8% in the same period.
Given this backdrop, with strong fundamentals like funds from operations and operating income, GLPI, LADR, and WSR seem to be resilient. Let’s take a closer look at these stocks.
Gaming and Leisure Properties, Inc. (GLPI)
GLPI is engaged in the business of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements. Its portfolio consists of interests in approximately 57 gaming and related facilities, comprising the real property associated with gaming and related facilities.
On March 24, the company paid its 2023 first-quarter dividend of $0.72 per share and a special dividend of $0.25 per share related to the sale of the Tropicana Las Vegas building. Its four-year average dividend yield is 6.28%, while its current dividend of $2.88 translates to a yield of 5.53% on prevailing prices.
On January 3, GLPI announced the completion of its acquisition from Bally's Corporation (BALY) of the real property assets of Bally's Tiverton and Bally's Biloxi for consideration of $635 million, inclusive of $15 million in the form of OP units.
With this acquisition, the normalized rent coverage on Master Lease is expected to be 2x in the first calendar year following closing. Meanwhile, the company continues to expand its footprint by entering a new state, Rhode Island.
GLPI’s total revenue increased 12.8% year-over-year to $336.39 million for the fourth quarter that ended December 31, 2022. Its income from operations grew 34.8% from the year-ago value to $275.46 million.
The company’s net income and adjusted EBITDA increased 66.9% and 12.6% year-over-year to $199.59 million and $312.01 million, respectively. Also, its FFO per share came in at $0.97, representing an increase of 31.1% year-over-year.
Analysts expect GLPI’s FFO and revenue for the quarter that ended on March 31, 2023, to increase 26.6% and 10.2% year-over-year to $0.90 and $346.97 million, respectively. It surpassed consensus revenue estimates in each of the trailing four quarters. Over the past six months, the stock has gained 13.8% to close the last trading session at $51.52.
GLPI’s POWR Ratings reflect solid prospects. According to our proprietary rating system, it has an overall rating of B, translating to Buy. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It has an A grade for Sentiment and a B for Growth, Stability, and Quality. It is ranked #3 out of 47 stocks in the REITs - Diversified industry. Click here to see the additional ratings of GLPI for Value and Momentum.
Ladder Capital Corp (LADR)
LADR is a commercial REIT in the United States. The company operates through three segments: Loans; Securities; and Real Estate. With $6.0 billion of assets as of December 31, 2022, it specializes in underwriting commercial real estate and offering flexible capital solutions within a sophisticated platform.
On March 15, the company declared the first quarter dividend of $0.23 per share of Class A common stock, payable on April 17, 2023. LADR’s four-year average dividend yield is 9.50%, and its current dividend of $0.92 translates to a 9.84% yield on the current price level.
During the fiscal fourth quarter (ended December 31, 2022), LADR’s net interest income increased 29.1% year-over-year to $37.30 million. The company’s net income improved 158.9% from the year-ago value to $74.25 million, while its distributable earnings increased 13.2% year-over-year to $38.86 million. Also, its distributable EPS came in at $0.31, representing an increase of 14.8% year-over-year.
For the quarter that ended on March 31, 2023, LADR’s EPS is expected to increase 19.2% year-over-year to $0.30. Its revenue for the same quarter is expected to amount to $71.15 million. It surpassed the consensus EPS and revenue estimates in each of the trailing four quarters, which is promising.
The REIT has gained 2.2% over the past six months to close the last trading session at $9.35.
LADR’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of B, which equates to Buy in our proprietary rating system.
It has an A grade for Sentiment and a B for Growth and Value. Within the same industry, it is ranked first. To see the other ratings of LADR for Momentum, Stability, and Quality, click here.
Whitestone REIT (WSR)
WSR is a community-centered real estate investment trust that acquires, owns, operates and develops high-quality open-air retail centers located in some of the fastest-growing markets in the country: Phoenix, Austin, Dallas-Fort Worth, Houston and San Antonio.
On March 9, the company declared a quarterly dividend of $0.12 per share for the second quarter of 2023. The dividend shall be paid to its shareholders monthly at the rate of $0.04 per share. WSR’s four-year average dividend yield is 7.32%, while its current dividend of $0.48 translates to a yield of 5.34% on prevailing prices.
For the fourth quarter that ended on December 31, 2022, WSR’s total revenue increased 5% year-over-year to $34.92 million. During the same period, the trust’s income from continuing operations and attributable net income came in at $20.23 million and $19.94 million, representing a 664% and 664.5% improvement year-over-year, respectively. Also, its FFO stood at $0.23, up 9.5% from the prior-year quarter.
Analysts expect WSR’s revenue for the first quarter (ended March 31, 2023) to increase 4.6% year-over-year to $35.68 million. The trust’s FFO per unit is expected to be $0.25 in the same period. Both revenue and FFO per unit are expected to increase to $148.13 million and $1.01 in the fiscal year ending December 2024. Moreover, WSR surpassed the revenue estimates in three of the trailing four quarters.
The REIT has gained 2.9% over the past six months to close the last trading session at $8.99.
WSR’s POWR Ratings reflect its promising outlook. The stock has an overall B rating, which equates to Buy in our proprietary rating system. It also has B grades for Stability and Sentiment. The stock is ranked #4 among 47 stocks in the same industry.
Beyond what we’ve stated above, we have also given WSR grades for Growth, Value, Momentum, and Quality. Get all WSR ratings here.
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GLPI shares were trading at $51.22 per share on Tuesday afternoon, down $0.30 (-0.58%). Year-to-date, GLPI has gained 0.12%, versus a 7.28% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
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