Stocks specializing in real estate, such as real estate investment trusts (REITs), are a great option for investors seeking exposure to the real estate market without buying properties for a significant upfront cost.
REITs are solid investment options because they typically offer very high dividends to investors. To be classified as real estate investment trusts, companies must distribute at least 90% of their taxable income to shareholders primarily through dividend payments.
Below are a few companies that all engage in the real estate market. They have recently provided investors with a strong rate of return and are looking to continue that trend.
Top Real Estate Stocks: Forestar Group (FOR)
Forestar Group (NYSE:FOR) is a company that focuses on the ownership of residential lots, primarily for single-family homes, within 23 states. In fiscal year 2023, Forestar Group sold approximately 14,000 lots.
On April 18, FOR reported earnings for the second quarter of fiscal year 2024, which stated that total revenue increased by 11% and net income rose by approximately 67% compared to the previous year. Also, within the same time period, the number of residential lots sold increased by 10%. Forestar’s outlook for the fiscal year 2024 anticipates that it will sell roughly 15,000 residential lots.
Over the past year, its share price has increased by 75%, which has been due to the projected increase in new home construction, especially with the forecasted drop in mortgage rates.
Forestar is a great pick for investors seeking exposure to real estate. It offers strong growth prospects in 2024 and has beaten recent analyst predictions for earnings for fiscal year 2024 so far. It’s a strong buy opportunity that is still trading at a fair valuation.
Innovative Industrial Properties (IIPR)
Innovative Industrial Properties (NYSE:IIPR) is an industrial REIT that provides leasing services for specialized properties for the regulated cannabis industry. It operates over 100 facilities located in 19 states.
It’s a company that has experienced a resurgence in investor interest and profitably followed a large downtrend in its share price during 2022. During this time, IIPR was experiencing issues regarding delinquent tenants, leading to investors’ uncertainty regarding the future of IIPR.
Since then, especially in 2024, IIPR has corrected its glaring tenant issues. And with new industry regulations, IIPR re-leasing capabilities have become a much more straightforward process.
One of the main draws for investors is its solid and consistent dividend yield of approximately 7.54% on an annual basis.
On February 26, IIPR reported earnings for the fourth quarter full year 2023, stating that total revenue increased by 12% and net income remained practically unchanged from the prior year.
Over this past year, its share price has grown by 44% and offers investors promising growth prospects within a developing segment of the real estate industry.
Top Real Estate Stocks: VICI Properties (VICI)
VICI Properties (NYSE:VICI) is a REIT that owns a number of very well-known gaming and experimental properties in the U.S. and Canada, such as Caesars Palace Las Vegas, MGM Grand, and the Venetian Resort Las Vegas.
Over this past year, its share price has fallen by 14%, partly due to lower-than-expected guidance for fiscal year 2024. However, the selloff may be overblown, and investors have a unique opportunity to purchase shares at a reduced price.
On February 22, VICI Properties announced its fourth quarter full-year earnings results, which stated that total revenue increased by 21% and net income rose by 24%.
VICI Properties also supplies investors with a decent dividend yield of 5.83% on an annual basis. Its most recent quarterly dividend amounted to forty-two cents per share.
Even with investors somewhat weary of its projected guidance for 2024, its fourth-quarter earnings result beat analyst expectations for both revenue and earnings per share. Due to its being oversold, it now offers investors a fantastic entry point for a robust and stable REIT.
As of this writing, Noah Bolton did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.