Tags: reits | blue chip | real estate investment | seeking alpha

Seeking Alpha: 3 Blue-Chip REITs for Sleeping Well at Night

Seeking Alpha: 3 Blue-Chip REITs for Sleeping Well at Night
(Dollar Photo Club)

By    |   Friday, 30 October 2015 07:02 AM

The Intelligent REIT Investor’s Brad Thomas confesses to having searched the investment world over for the cream of the crop, equating REIT investment picks to the Everlasting Gobstopper candy from the Gene Wilder film "Willy Wonka and the Chocolate Factory."

“Within my Intelligent REIT Lab I research around 100 Equity REITs and there are around 25 that I consider to be premium brands - or what I call SWANs (for sleeping well at night). However, many of these companies are trading above fair value and that means that Mr. Market has placed a higher price on the everlasting gobstopper attributes,” he writes for Seeking Alpha.com.

“My job is to dig deep into the best in class brands and help you uncover the sweetness so you can sleep well at night. I assure you, there will be no sucker yields in my cookbook, just dividend stalwarts that can be purchased at a discount,” he vows.

“I assure you, I will not be passing out junk food that makes you get queasy. My blue chip REIT list only includes the best quality REITs that have a proven track record for dividend performance. These companies have the strongest sources of differentiation that have become powerful and predictable platforms of dividend repeatability,” he writes.

His 3 picks from his upcoming edition of the Forbes Real Estate Investor:

  • Tanger Factory Outlets (NYSE:SKT) “is a classic everlasting gobstopper REIT. The pure-play outlet company has a market cap of around $3.423 billion, smaller than the mall-based peers, and SKT's competitive advantage is rooted in the disciplined risk management practices that has led to over 21 years in a row of dividend increases.”
  • Welltower (NYSE:HCN) is a large cap ($23.95 billion) REIT that owns around 1,400 healthcare properties. “The company recently launched a rebranding campaign in which it changed its name (to Welltower) and I consider the very predictable earnings history (and the ingredients) the security appears to be soundly valued," he said.
  • Healthcare Trust of America (NYSE:HTA). “Although this REIT does not have the same long-term record as the other stalwarts, the company has been able to generate very predictable results, worthy of the gobstopper recipe.”
To be sure, certain real-estate investment trusts “are quickly becoming an attractive option” for investors “frantically seeking anything that can stop the bleeding in their portfolios,” the New York Times reports.
 
Fitch Ratings has reported a surge in the number of REITs planning stock buybacks through the rest of 2015 and into 2016 to prop up their beaten-down prices, the Times reported.

“The companies are signaling there’s a big disconnect between the current valuation in the public market and where private market real estate values are,” Thomas Bohjalian, an executive vice president at Cohen & Steers, which holds shares in REITs, told the Times.

But REITs, like other investments, come with risk.

"And experts caution investors not to blindly jump into those that promise the biggest buybacks or the frothiest yields," the Times reported.

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The Intelligent REIT Investor’s Brad Thomas confesses to having searched the investment world over for the cream of the crop, equating REIT investment picks to the Everlasting Gobstopper candy from the Gene Wilder film "Willy Wonka and the Chocolate Factory."
reits, blue chip, real estate investment, seeking alpha
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2015-02-30
Friday, 30 October 2015 07:02 AM
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