Forget A Rate Hike, Buy These 4 REITs On The Dip
Zacks Investment Research | Sep 20, 2016 03:31AM ET
Speculations over rate hike have always kept the real estate investment trust (REIT) investors on their toes and this time is no different. In fact, the hawkish statements by the Fed officials including the Zacks Screener .
We screened stocks with a Zacks Rank of #1 (Strong Buy) or #2 (Buy), which means that they are witnessing positive estimate revisions. We then searched for those stocks that have witnessed price dips in the past four weeks and finally zeroed in on them with P/E ratio at a discount to the industry average, making their valuation all the more attractive.
Here are the four stocks that meet our criteria:
Jersey City, NJ-based Mack-Cali Realty Corp. (NYSE:CLI) is a REIT that is engaged in providing management, leasing, development and other tenant-related services for office and multi-family real estate assets. This Zacks Rank #2 company is making solid progress in its 20/15 strategic plan, which is aimed at transforming the company by focusing on waterfront and transit-based office holdings in the Northeast, and on luxury multi-family portfolio growth. It also includes planned exits from non-core markets and capital improvements in core assets. However, the stock has declined 2.46% in the past four weeks.
Estimates for the company for 2015 and 2016 are trending up, suggesting bullishness ahead. What’s more, its valuation remains attractive on a P/E basis with the stock trading at 12.76x, a discount of around 14.4% to the industry average of 14.9x.
MACK CALI CORP Price
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Headquartered in Irvine, CA, HCP, Inc. (NYSE:HCP) acquires, develops, manages, sells and leases a diverse portfolio of healthcare real estate related properties. This Zacks Rank #2 company stands to gain from its diverse portfolio, rising healthcare spending and an aging population.
Though the stock has declined 5.02% in the past four weeks, analysts are bullish on the company and have raised their estimates. Also, the valuation too looks cheap with the stock trading at a P/E of 13.15x, reflecting a discount of over 11.7% to the industry average.
EPR Properties (NYSE:EPR) , based in Kansas City, MO, is a specialty real estate investment trust that invests in three primary segments, Entertainment, Recreation and Education. Its properties include megaplex theatres, entertainment retail centers, and destination recreational and specialty properties. Its current cash flow growth is 17.09% compared with the industry average of 9.42%. Further, projected sales growth is 20.71% against the industry average of 1.67%.
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Though this Zacks Rank #2 stock has declined around 3.14% in the past four weeks, it remains a solid pick with its P/E trading at 16.04x, a discount of over 9% to the industry average.
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