As Markets Tank, These Real Estate Investment Trusts Hit Higher Highs

Real estate investment trusts — also known as REIT’s — outperformed the markets by a wide margin last week. As a matter of fact, while many big stocks were hitting yearly lows, some REIT’s managed to establish higher highs. These stocks vary widely when it comes to underlying financials. Some have high p/e’s and low dividend yields and others have low p/e’s and high yields.

Here’s a short look:

Ventas is a New York Stock Exchange-traded real estate investment trust that has moved from $45 in April to last week’s closing price of $65 for something approaching a 50% gain. While most of the rest of the stock market was selling off, it didn’t seem to bother Ventas which hit its 2018 high on Friday. The price/earnings ratio is a steep 48 and long-term debt exceeds shareholder equity, both of which suggest a deeper look even as higher highs are notched. They’re paying a 4.83% dividend.

Here is the chart for the REIT known as Sun Communities:

From $83 in March to Friday’s closing price of 108: not a bad run for about 8 months time. Sun is another REIT with a much higher than the market price/earnings ratio: it’s 84.  Earnings over the last 5 years have been very good. Long-term debt is greater than shareholder equity. The dividend comes to 2.62%. Sun Communities is traded on the NYSE.

PennyMac Mortgage is also New York Stock Exchange listed with headquarters in California. Here’s what their daily price chart looks like:

Another nice move: this one traded at just above $15 in March and now goes for $21. The price/earnings ratio is a reasonable 12 and it’s available here at just about book value. PennyMac has a lot of debt on its books — shareholder equity exceeds the long-term debt. Investors receive an 8.8% dividend yield, a higher than usual pay-out for a REIT like this.

Here’s the American Tower chart:

Another nice move: $130 in March and last week all the way up to a new yearly high of 168 before backing off just a bit. This REIT is based in Boston and trades on the New York Stock Exchange. Earnings have been good this year and in the 5-year time frame. American Tower has a lot of debt: long-term debt is greater than shareholder equity by more than 3 times. The dividend yield is 1.9%.

This last chart reflects the price action in the sector generally:

The Real Estate Exchange Traded Fund is NYSE-listed and very liquid with more than 14 million shares traded last week. It’s an easy way to participate in the sector and many investors take advantage of that. The price action shows that it hit a higher high last week and then backed off. The uptrend from the March lows remains intact.

I do not hold positions in these investments. No recommendations are made one way or the other.  If you’re an investor, you’d want to look much deeper into each of these situations. You can lose money trading or investing in stocks and other instruments. Always do your own independent research, due diligence and seek professional advice from a licensed investment advisor.