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Best Real Estate Stock

Best real estate stocks to buy

If you are looking for information about real estate stocks, you came to the right place! In this article I will provide you with a list of real estate stock that will help you decide if stocks in certain niches are interesting as an investment.

What is an real estate stock?

An real estate stock is a company with income from one of more real estate businesses. Normally the value of such stocks rise when house prices go up, but they can fall greatly after some years as well if for instance housing sales drop heavily or interest rates raise suddenly and buyers cant buy anymore (higher interest rates mean that people need to pay more per month for their mortgage, making it harder to buy a house).

What are the best real estate stocks?

I think there are great opportunities in niche markets with limited players and good demographics. However, I do not think that the best approach is buying shares of companies like Home Depot or Lowes because these stocks already offer high prospects and growth. The best stocks to pick are those that have a lot of room for growth and at the same time limited competitors.

Why invest in real estate stocks?

There are several reasons why you should consider real estate stocks as an investment.

  1. Good dividend yield: Real estate stocks usually pay dividends twice a year and they usually have a high dividend yield (good return on your investment). For example, currently the average dividend yield for the S&P 500 is only 2.8%. In my opinion if you hold a stock for 3-10 years, dividend yield is one of the most important things to look at.
  2. Good appreciation: if you buy such stocks and hold them correctly (for many many years), your money will grow significantly over time.
  3. Good companies: some real estate stocks are considered quite safe.
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Advantages real estate stock

There are some advantages for real estate stocks, first of all its a business with high barriers to entry, because if you want to enter the market as a seller or developer you need a lot money and/or loans.

For that reason it’s harder for new entrants to grow. Also real estate is the classic hedge against crisis , especially housing prices because there are relatively few people who can afford buying houses and thus there is a limited amount of houses to sell.

Disadvantages real estate stocks

There are some disadvantages for real estate stocks, first of all real estate stocks are somewhat more volatile than other stocks. Also, there are some risks for real estate companies because this is a pretty cyclical business, meaning that the revenue increases and decreases on a yearly basis according to the state of economy.

The Best Real Estate Stocks Of 2021

We made a list of the best real estate stocks to invest in for the next 5 years. We analyzed all the real estate stock from different niches and made a list of those that have one or more important characteristics: good dividend yield, high expected growth rate, great assets under management (AUM) and low risk.

  1. CubeSmart (NYSE: CUBE)
  2. Kimco Realty Corporation (NYSE: KIM)
  3. EPR Properties (NYSE: EPR)
  4. Kilroy Realty Corporation (NYSE: KRC)
  5. Digital Realty Trust, Inc. (NYSE: DLR)

1. CubeSmart (NYSE: CUBE)

Cubesmart has a market capitalization of $1.23 billion; its shares were traded at around $39.99 with a P/E ratio of 44.10 and a beta of 1.01. The company has paid a dividend of 38 cents per share within the last year and has a 2-year dividend growth rate of 4%.

  • CubeSmart has an expected long-term growth rate of 6.80%. The company’s revenue was up 9.2% on a year-over-year basis. During the same period last year, the business posted $0.75 EPS.

2. Kimco Realty Corporation (NYSE: KIM)

Kimco Realty Corporation has a market capitalization of $4.26 billion; its shares were traded at around $22.65 with a P/E ratio of 60.10 and a beta of 0.09. The company has paid a dividend of 48 cents per share within the last year and has a 2-year dividend growth rate of 1.60%.

  • Kimco Realty Corporation has an expected long-term growth rate of 6.80%. The company’s revenue was up 2.3% on a year-over-year basis. During the same period last year, the business posted $0.54 EPS.

3. EPR Properties (NYSE: EPR)

EPR Properties has a market capitalization of $5.25 billion; its shares were traded at around $38.24 with a P/E ratio of 30.70 and a beta of 1.79. The company has paid a dividend of 28 cents per share within the last year and has a 2-year dividend growth rate of 4.10%.

  • EPR Properties has an expected long-term growth rate of 14.40%. The company’s revenue was up 3.4% on a year-over-year basis. During the same period last year, the business posted $0.92 EPS.

4. Kilroy Realty Corporation (NYSE: KRC)

Kilroy Realty Corporation has a market capitalization of $3.32 billion; its shares were traded at around $56.23 with a P/E ratio of 39.00 and a beta of 0.06 . The company has paid a dividend of 32 cents per share within the last year and has a 2-year dividend growth rate of 1.60%.

  • Kilroy Realty Corporation has an expected long-term growth rate of 5.20%. The company’s revenue was up 3.2% on a year-over-year basis. During the same period last year, the business posted $0.59 EPS.

5. Digital Realty Trust, Inc. (NYSE: DLR)

Digital Realty Trust, Inc. has a market capitalization of $9.82 billion; its shares were traded at around $70.21 with a P/E ratio of 19.90 and a beta of 0.74 . The company has paid a dividend of 80.00 cents per share within the last year and has a 2-year dividend growth rate of 3.20%.

  • Digital Realty Trust, Inc. has an expected long-term growth rate of 12.60%. The company’s revenue was up 8% on a year-over-year basis. During the same period last year, the business posted $2.39 EPS.
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Should you invest in real estate stocks?

Investing in real estate stock is a very interesting approach to get passive income and diversify your portfolio. I would advise everybody to invest in real estate because the asset class has proven to be profitable for many years and its all about picking the right stocks that could give you great returns over time.

Investing in real estate stock is not only great to diversify your portfolio, it is also a great opportunity to earn money every month because you will receive dividends.

How to find the best real estate stocks?

When you search for information about good real estate stock, first look at the overall figures that matter most for this specific niche , then look at their balance sheet.

When I search for real estate stocks, I first select a country or state. Then if it is a city from that country , I go to the % of house prices compared to income. After that I select the overall % of people who are home owners, this one is important because if more people own a house , you can bet that demand will go up in the future!

The next thing after that is number of properties for sale and the overall price development in general. You should also look at whether or not you think the market is getting overvalued.

Conclusion about real estate stocks

Investing in real estate stocks can be a great idea, the reason I suggest investing in real estate stock is because it is a very stable asset class. If you have a look at the performance charts for this market, you will see that real estate has been a great performer for years!

There are many guys out there who have made lots of money by just buying the right stocks and holding them over time. I would advise you to invest in real estate stock because it will give you a great return on investment, just make sure that you have done your homework.


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Frequently asked questions

Real estate investment trusts (“REITs”) allow individuals to invest in large-scale, income-producing real estate. A REIT is a company that owns and typically operates income-producing real estate or related assets.

There are four common Halal investment options: Stocks, Businesses, Real Estate, and Cash. Stocks – publicly traded shares of companies – are the most common investment type Muslims use.

Ways to invest in real estate include purchasing shares of a REIT, owning a home as a primary residence, and purchasing a single-family rental property. Three reasons for investing in real estate are generating rental income, profiting from potential appreciation in property value, and tax benefits.

According to a report by McKinsey & Company, in the U.S., the dollar volume of commercial real estate sales in the third quarter of 2020 plummeted 57%, compared with the same period in 2019. However, real estate stocks have always been a top choice of investors due to their durability and strength.

Here’s a look at some of the most important things to consider if you plan to invest in the real estate market:

  1. Property Location
  2. Valuation of the Property
  3. Investment Purpose and Investment Horizon
  4. Expected Cash Flows and Profit Opportunities
  5. Be Careful with Leverage

Generally, you’d sell the shares and use the proceeds as seed capital. However, if you hold stock in an individual retirement account, you might choose to first transfer your shares to a self-directed account where you can sell them without having to pay capital gains taxes, then invest them in real estate.

Stock prices are much more volatile than real estate. The prices of stocks can move up and down much faster than real estate prices. That volatility can be stomach-churning unless you take a long view on the stocks and funds you purchase for your portfolio, meaning you plan to buy and hold despite volatility.

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