REITs diversify investments across property types, reducing risk, and must distribute most of their taxable income as dividends, offering a steady income stream. Therefore, high-potential REITs, American Tower Corporation (AMT), Simon Property Group, Inc. (SPG), and Gaming and Leisure Properties, Inc. (GLPI) might be worthy buys for real estate investors.

REITs allow individual investors to enter the real estate market without owning physical properties. These entities are structured to distribute a significant portion of their taxable income as dividends to shareholders, often providing attractive income yields. The REIT market is expected to grow at a CAGR of 7.1% by 2030.

Moreover, owning shares in retail REITs provides investors with an opportunity to earn high returns since the retail properties appreciate over time, while diversified REITs are attractive for investors looking to gain exposure to a variety of real estate asset types. 

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. Its portfolio includes over 224,000 communications sites and a highly interconnected footprint of U.S. data center facilities.

AMT pays a $6.80 per share dividend annually, translating to a 2.86% yield on the current share price. Its four-year dividend yield is 2.51%. 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 176.6% higher than the industry average of 1.37%. Furthermore, the stock’s 21.95% trailing-12-month net income margin is 135.8% higher than the industry average of 9.31%.

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 $2.84 billion. Its EPS is expected to be $2.55 for the same quarter. AMT surpassed the consensus revenue estimates in each of the trailing four quarters, which is impressive.

The stock gained 22.2% over the past nine to close the last trading session at $228.16.  

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 a B grade for Sentiment, Momentum, Stability, Growth, and Quality. It is ranked #4 in the 44-stock REITs – Diversified industry. 

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

On June 14, WHP Global, in collaboration with an affiliate of SPG, Brookfield Properties, and Centennial Real Estate, formed PHOENIX, a new retail operating platform, and has received court approval to acquire a majority of Express, Inc. operations. The new joint venture, PHOENIX, will operate all direct-to-consumer commerce in the United States for Express and Bonobos.

SPG’s total revenue increased 6.8% year-over-year to $1.44 billion during the first quarter ended March 31, 2024. Its consolidated net income rose 62% from the year-ago value to $841.15 million. The company’s funds from operations came in at $1.33 billion and $3.56 per share, up 30% and 29.9% from the prior year’s quarter, respectively.

According to the full-year 2024 guidance, SPG expects its net income attributable to common stockholders per share to range from $7.38 to $7.53. Its estimated FFO per share is expected between $12.75 and $12.90.

Street expects SPG’s revenue for the fiscal year 2025 to increase 3% year-over-year to $5.56 billion. For the fiscal year 2024, the company’s EPS is expected to grow 2.3% year-over-year to $12.79. Furthermore, the company surpassed the consensus revenue estimates in each of the trailing four quarters.

SPG’s stock has gained 32.9% over the past nine months and 31.5% over the past year to close the last trading session at $155.54. The company’s forward annual dividend of $8.20 yields 5.27% on the prevailing price level.

SPG has an overall B rating, equating to a Buy in our proprietary rating system. SPG also has a B grade for Stability, Momentum, and Quality. It is ranked #2 in the REITs – Retail industry. 

To see additional POWR Ratings for Value, Sentiment, and Growth, click here.

Gaming and Leisure Properties, Inc. (GLPI)

GLPI acquires, finances, and owns real estate properties leased to gaming operators under triple-net lease arrangements, where tenants are responsible for facility maintenance, insurance, taxes, utilities, and other services necessary for the leased properties and the businesses conducted on them.

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 6.31% yield on the current share price. Its four-year dividend yield is 6.19%. 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 45.8% higher than the 66.21% industry average. Its 52.39% trailing-12-month net income margin is 462.6% higher than the 9.31% industry average. Likewise, the stock’s 6.61% trailing-12-month ROTA is 383.2% higher than the 1.37% 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 $383.53 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 12.9% over the past three months to close its last trading session at $49.26.

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

GLPI has a B grade for Momentum, Sentiment, Quality, and Stability. It is ranked #3 in the REITs – Diversified industry.

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

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AMT shares were trading at $226.98 per share on Wednesday afternoon, down $1.18 (-0.52%). Year-to-date, AMT has gained 6.97%, versus a 10.46% 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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