3 REITs For Your Black Friday Shopping Cart
Zacks Investment Research | Nov 25, 2016 02:06AM ET
Americans have already celebrated nature’s bounty on Thanksgiving Day. Now, as Black Friday kicks off the annual holiday shopping season, retailers have a chance to enjoy abundant sales.
And why not? Solid employment figures and rising wages drop hints of fatter purses this holiday season. Also, people have benefited from low inflation, leading to increased possibilities of higher consumer spending this time.
In fact, per a total returns of 26.71% in the first 10 months of 2016 as against the 5.87% logged by the S&P 500.
But retail REITs too are fast catching up with this trend. In fact, crippled by lesser traffic in malls and store closures, retail REITs are now transforming as distribution hubs. Also, they are turning into swanky entertainment zones by letting spaces to movie theaters and restaurants.
Expansion of the small shop portfolio is also a priority for the likes of Kimco Realty Corporation (NYSE:KIM) . This is because such shops comprise service-based industries like saloons and spas, personal fitness, and medical practices which enjoy frequent customer traffic and are Internet-resistant, thereby strategically offering what online retail can’t.
Stock Picks
Therefore to capitalize on this trend, we have handpicked three stocks for your Black Friday cart. Aside from having solid fundamentals and a decent dividend yield, these REITs hold a favorable Zacks Rank pointing to high chances of market outperformance over the next 1–3 months. These stocks are witnessing estimate revisions too reflecting analysts’ positive view on these stocks.
We suggest investing in DCT Industrial Trust Inc. (NYSE:DCT) which carries a Zacks Rank #2 (Buy).This Denver, CO-based industrial REIT delivered an average positive surprise of 5.18% over the trailing four quarters. The stock has a dividend yield of 2.6%.
This stock is also witnessing estimate revisions in the positive direction, reflecting investors’ bullish view on the stock. For 2016, the Zacks Consensus Estimate moved up 4 cents to $2.23 for 2016 and 3 cents to $2.36 for 2017 over the past 30 days.
Out next industrial REIT stock pick is Duke Realty Corporation (NYSE:DRE) . It has a Zacks Rank #2 and came up with a positive FFO per share surprise of 3.3% in the last reported quarter. Moreover, this Indianapolis, IN-based company is making great strides in expanding its industrial real estate business. The stock has witnessed positive estimate revisions in the past one month. In fact, the Zacks Consensus Estimate for fourth-quarter 2016 is currently pegged at 31 cents, reflecting growth of 5.2%. It has a dividend yield of around 3.1%.
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The cart will not be complete without a retail REIT. A promising one on the shelf is New York-based Urban Edge Properties (NYSE:UE) , which acquires, develops, owns, manages and improves shopping centers in urban communities, mainly in the New York metropolitan region.
It operates within the United States and came into existence following a spin-off by Vornado Realty Trust (NYSE:VNO) in early 2015. Urban Edge Properties holds a Zacks Rank #2 and its dividend yield is 2.96%. The expected growth rate for FFO per share is 36.6% for 2016 and 5.9% for 2017. The stock has also witnessed positive estimate revisions, reflecting analysts’ bullishness.
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