Real estate investment trusts or REIT stocks to buy can offer investors reassurances during tricky economic cycles. In addition, they can position you for a more favorable outcome if you anticipate a shift in monetary policy.
Generally speaking, REITs are sensitive to interest rate fluctuations. Further, under a low interest rate environment, this market category can be attractive because the underlying enterprises generally pay robust passive income. Under high interest rates, government bonds begin competing with private enterprises, posing challenges.
While it’s not a sure thing, the Federal Reserve may consider a more dovish policy. If so, passive income providers can become much more attractive. Below are REIT stocks to buy.
Healthpeak Properties (DOC)
Based in Denver, Colorado, Healthpeak Properties (NYSE:DOC) is one of the REIT stocks to buy in the healthcare facilities space. This includes investments related to senior housing, life science and medical offices. Fundamentally, DOC is attractive because while so many headlines focus on attaining wealth, it doesn’t mean anything without health. In other words, people largely will do anything to stay alive.
As a result, healthcare related ideas present an opportunistic profile and DOC stock is no different. Financially, though, Healthpeak comes off as a mixed bag. Between the second quarter of last year to Q1 2024, the average earnings surprise came out to 6% below parity.
The good news is that the REIT is posting net income, to the tune of $193.06 million in the trailing 12 months (TTM). However, the not so great news is that occasionally, Healthpeak can miss the mark widely. Still, it’s important to note that the current quarterly revenue growth rate (year-over-year) stands at 15.4%.
For fiscal 2024, analysts anticipate 19.9% upside in sales to $2.61 billion. Combined with a forward yield of 6.3%, DOC should be on your radar for REIT stocks to buy.
Park Hotels & Resorts (PK)
Based in Tysons, Virginia, Park Hotels & Resorts (NYSE:PK) specializes – obviously – in the lodgings space. Per its corporate profile, Park is one of the largest REIT stocks to buy in the ecosystem. The underlying enterprise features a diverse portfolio of market-leading hotels and resorts commanding significant value. Its portfolio consists of 43 premium-branded establishments covering over 26,000 rooms.
Fundamentally, PK could benefit from the heightened sense of travel prioritization; that’s basically an offshoot of the revenge travel phenomenon. In terms of earnings performances, Park is hit or miss. That said, it’s been hitting more often than not in the past four quarters since Q1. The average surprise comes out to 48.75%.
In the TTM period, net income landed at $90 million on revenue of $2.7 billion. Currently, Park is experiencing a quarterly revenue decline. However, fiscal 2025 is projected to be a decent year, with consensus sales rising to $2.75 billion. Further, the high-side target goes up to $3.02 billion.
Combined with a forward dividend yield of 6.29%, PK makes an attractive package for REIT stocks to buy.
Realty Income (O)
A no-brainer in terms of REIT stocks to buy, Realty Income (NYSE:O) focuses on the retail space. Per its public profile, Realty invests in free-standing, single-tenant commercial properties in the U.S., U.K. and Spain. It’s tremendously attractive because the tenants of the various properties cover a range of necessities, from home improvement retailers to pharmacies.
Stated differently, no matter what’s going on in the economy, people will need access to certain goods and services. With Realty housing these areas of needs, it enjoys consistent income. To be fair, its performance relative to analysts’ expectations have been lumpy. However, in the TTM period, the REIT posted net income of $776.99 million on revenue of $4.4 billion.
Notably, the quarterly revenue growth rate presently stands at 33.3%. For fiscal 2024, experts believe earnings will rise to $1.43 per share on sales of $5.04 billion. That’s up 13.5% on the bottom line and up 23.5% on the top.
Finally, Realty pays a forward annual dividend of 5.9% and guess what? It pays out monthly. You’ll want to keep close tabs on O stock.
On the date of publication, Josh Enomoto did not have (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.
