Real Estate Investment Trusts, or REITs, are popular dividend investments among income investors. That's because these dividend stocks have reliable revenue streams - but also because the REIT designation demands that 90% of taxable income gets delivered back to shareholders, often in the form of big quarterly dividend payments. As the economic recovery moves ahead, we think REITs will focus on stabilizing balance sheets, increasing property-level cash flow, and increasing the dividend payout to investors. Here are three REITs considered a buy that have outperformed the S&P in the last year.
American Tower Corporation (AMT), a real estate investment trust, operates as a wireless and broadcast communications infrastructure company. It develops, owns, and operates communications sites. AMT is the market leader in the wireless tower industry, and we think further tower purchases will enable it to continue to achieve greater economies of scale. We believe the network upgrades to 4G, notably LTE and WiMAX, will provide an additional revenue boost over the next several years. On March 22 2012, AMT announced its first ever quarterly distribution ($0.21 per share) to stockholders as it completed its REIT conversion in January. ATM is trading at $63.75 with a dividend yield of 1.33%. In the past year, the stock has hit a 52-week low of $46.04 and a 52-week high of $64.55. American Tower stock has been showing support around $63.59 and resistance in the $64.71 range. Technical indicators for the stock are bullish and S&P gives American Tower a very positive 5 STARS (out of 5) strong buy rating. Projected EPS for 2012 is $1.73 and $2.35 in 2013.
The Macerich Company (MAC) is involved in the acquisition, ownership, development, redevelopment, management and leasing of regional and community shopping centers located throughout the U.S. We think an improving economy and better job growth will contribute to continued positive retailer sentiment. We see owners of highly productive shopping centers located in and around high-barrier-to-entry metropolitan markets, such as MAC, continuing to generate very healthy occupancy and rent gains. MAC is trading at $60.00 with a dividend yield of 3.7%. In the past year, the stock has hit a 52-week low of $38.64 and a 52-week high of $59.83. Macerich stock has been showing support around $58.43 and resistance in the $59.93 range. Technical indicators for the stock are bullish and S&P gives MAC a positive 4 STARS (out of 5) buy rating. MAC had a FFO per share of $2.96 per share in 2011. The projected FFO for 2012 is $3.13 (a 5.7% increase from 2011) and $3.31 in 2013.
Taubman Centers (TCO) is a real estate investment trust that is the general partner of The Taubman Realty Group L.P., an operating partnership that owns, operates and develops regional shopping centers across the U.S. We think relatively good operating trends and a focus on owning upscale shopping centers and the use of long-term retail leases will continue to help insulate TCO from the challenges stemming from a tepid economic recovery. TCO is trading at $76.00 with a dividend yield of 2.46%. In the past year, the stock has hit a 52-week low of $46.74 and a 52-week high of $76.60. TCO stock has been showing support around $74.42 and resistance in the $77.26 range. Technical indicators for the stock are bullish. The projected FFO for 2012 is $3.17 and $3.33 in 2013.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.