These two triple-net REITs hold great promise, with a positive outlook ahead in 2016.
As I had written recently on Benzinga at the end of December, real estate investment trusts (REITS) National Retail Properties, Inc. and Realty Income Corporation are both “getting stronger” for 2016.Asset management is the most important piece of the investing puzzle
This is a great sentiment, and Stifel certainly agrees, expecting National Retail Properties to “do well next year.” The firm also noted that investors can “sleep well at night” while investing in Realty Income. Stifel views the company as a “safe and stable” name in the sector with steady growth in cash flow per share.
But attractive as this all is, REIT stocks trade at 5 percent below net asset value, this isn’t all bad, they are just still undervalued. Prospects for the REIT industry are still great as the sector has had a positive valuation and growth.
Despite recent Federal Reserve interest rate hike worries, REIT company stocks were able to lead the way throughout the fourth quarter.
As reported on Benzinga, National Retail Properties, Inc. is “strong and will continue to get stronger” and Realty Income Corporation since its IPO, has had annual returns north of 16.5 percent, according to Stifel. Get the best Advice For Investing In The Area You Want To Invest In & Key Investment Strategies Using REIT
Expansion Of US REITs Enters A Mature Phase
REITs are expected to generate nearly 15 percent total return; 6 percent generated from earnings growth, 4 percent derived from dividend income, while 5 percent generated from valuation expansion, according to JPMorgan.
REIT industry Continues To Display Strong Fundamentals
As I’ve written previously in the story, for example, Reality Income is continuing to get stronger. Stifel noted, “The company has a long-term history of creating value for shareholders despite its large size while maintaining a very conservative balance sheet. The company remains disciplined, generating consistent annual earnings growth through prudent capital allocation and investment discipline,” the firm added.
Of late, 2016 is forecasted to be a great year for REITS. The rising interest rates could bring both good and bad for this year. For homebuyers, purchases may become less affordable. Developers may be able to see more demand for apartment rentals in the real estate industry. Learn more about the property development and Redevelopment.
Read the full article on Benzinga.