REITs offer inflation-protected income as they own assets like real estate, which can adjust rents and values in response to rising prices. Therefore, fundamentally strong REITs, American Tower Corporation (AMT), Gaming and Leisure Properties, Inc. (GLPI), and Simon Property Group, Inc. (SPG) might be worthy buys to ensure an inflation-protected income.

The core personal consumption expenditures (PCE) price index rose by 0.2% in July, marking a 2.6% increase over the past year. This inflation measure, closely watched by the Federal Reserve, showed a slight uptick as the central bank prepares for its first interest rate cut in over four years.

Amid a high inflation environment, REITs may provide natural protection against inflation. Real estate rents and values tend to increase when prices do; this may support REIT dividend growth and provide a reliable income stream even during inflationary periods.

Considering these conducive trends, let’s take a look at the fundamentals of the three best REIT stocks.

American Tower Corporation (AMT)

AMT is a leading independent owner, operator, and developer of multitenant communications real estate with a portfolio of over 224,000 communications sites and a highly interconnected footprint of U.S. data center facilities.

AMT pays a $6.56 per share dividend annually, translating to a 2.79% yield on the current share price. Its four-year dividend yield is 2.54%. Also, the company’s dividend payouts have increased at a CAGR of 10.5% over the past three years.

AMT’s 3.78% trailing-12-month Return on Total Assets is 191.5% higher than the industry average of 1.30%. Furthermore, the stock’s 21.95% trailing-12-month net income margin is 135.4% higher than the industry average of 9.33%.

AMT’s total revenue for the second quarter ended June 30, 2024, was reported at $2.90 billion, up 4.6% year-over-year. Net income attributable to AMT common stockholders grew 89.3% year-over-year to $900 million. Net income attributable to AMT common stockholders per share increased 88.2% year-over-year to $1.92.

Street expects AMT’s revenue for the quarter ending September 2024 to increase marginally year-over-year to $2.83 billion. Its EPS is expected to be $2.45 for the same quarter. AMT surpassed the consensus revenue estimates in each of the trailing four quarters, which is impressive.

The stock gained 11% over the past nine to close the last trading session at $233.64.  

AMT’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, which translates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.    

AMT also has an A grade for Sentiment and a B for Momentum, Stability, Growth, and Quality. It is ranked #3 out of 45 stocks in the REITs – Diversified industry. 

Beyond what is stated above, we’ve also rated AMT for Value. Get all AMT ratings here.

Gaming and Leisure Properties, Inc. (GLPI)

GLPI is a self-administered and self-managed Pennsylvania real estate investment trust that acquires, finances, and owns real estate property to lease to gaming operators in triple-net lease arrangements.

On July 12, 2024, GLPI announced that it had entered into a binding term sheet with Bally’s Corporation (BALY), pursuant to which the company plans to acquire the real estate assets of BALY’s Kansas City Casino, BALY’s Shreveport Casino & Hotel, and the land under BALY’s permanent Chicago casino. Additionally, it will provide construction financing for BALY’s Chicago Casino Resort, with a total investment of about $1.59 trillion.

GLPI pays a $3.04 per share dividend annually, which translates to a 5.85% yield on the current share price. Its four-year dividend yield is 6.11%. The company’s dividend payouts have grown at a CAGR of 5.8% over the past three years.

In terms of the trailing-12-month gross profit margin, GLPI’s 96.53% is 46.7% higher than the 65.79% industry average. Its 52.39% trailing-12-month net income margin is 461.6% higher than the 9.33% industry average. Likewise, the stock’s 6.61% trailing-12-month ROTA is 409.2% higher than the 1.30% industry average.

GLPI’s total income from real estate for the fiscal second quarter that ended June 30, 2024, increased 6.5% year-over-year to $380.63 million. Net income attributable to common shareholders and earnings per share stood at $208.25 million and $0.77, up 33.8% and 30.5% year-over-year, respectively.

For the third quarter ending September 2024, GLPI’s revenue is expected to increase 7% year-over-year to $385.19 million. Its FFO for the same quarter is expected to increase 3% year-over-year to $0.97. GLPI surpassed the consensus revenue estimates in each of the trailing four quarters. 

GLPI gained 15.6% over the past three months to close its last trading session at $51.50.

GLPI has an overall B rating, equating to a Buy in our proprietary rating system.

GLPI has a B grade for Momentum, Quality, and Stability. It is ranked #5 out of 45 stocks in the REITs – Diversified industry.

For additional GLPI’s Growth, Sentiment, and Value, click here.

Simon Property Group, Inc. (SPG)

SPG is a real estate investment trust engaged in the ownership of premier shopping, dining, entertainment, and mixed-use destinations and is an S&P 100 company.

On July 10, SPG and BP p.l.c. (BP) entered into a deal for BP’s global EV charging business, BP pulse, under which BP will install and operate EV charging gigahubs on 75 sites with SPG. Under the arrangement, BP pulse will install its ultra-fast gigahubs at 75 Simon® locations. This will add over 900 charging bays across the United States.

SPG pays a $8.20 per share dividend annually, translating to a 4.97% yield on the current share price. Its four-year dividend yield is 5.59%. Also, the company’s dividend payouts have increased at a CAGR of 14.2% over the past three years.

SPG’s 7.70% trailing-12-month Return on Total Assets is 493.5% higher than the industry average of 1.30%. Furthermore, the stock’s 44.01% trailing-12-month net income margin is 371.9% higher than the industry average of 9.33%.

SPG’s total revenue increased 6.6% year-over-year to $1.46 billion during the second quarter ended June 30, 2024. Its consolidated net income rose 2.1% from the year-ago value to $569.44 million. The company’s earnings per share increased 1.3% year-over-year to $1.51.

Street expects SPG’s revenue for the fiscal year 2025 to increase 3.1% year-over-year to $5.49 billion. For the fiscal year 2024, the company’s EPS is expected to grow 2.4% year-over-year to $12.81. Furthermore, the company surpassed the consensus revenue estimates in each of the trailing four quarters.

SPG’s stock has gained 25.5% over the past nine months and 42.8% over the past year to close the last trading session at $164.18.

It’s no surprise that SPG has an overall rating of B, which translates to Buy in our POWR Ratings system.

SPG has a B grade for Momentum, Sentiment, and Quality. It is ranked #2 out of 30 stocks in the REITs – Retail industry.

For additional SPG’s Growth, Stability, and Value, click here.

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AMT shares were trading at $234.98 per share on Friday afternoon, up $1.34 (+0.57%). Year-to-date, AMT has gained 10.74%, versus a 14.44% rise in the benchmark S&P 500 index during the same period.

About the Author: Nidhi Agarwal

Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities. More...

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