When investors consider the vast universe of REIT (Real Estate Investment Trust) stocks they can buy, it is always difficult to make informed decisions. So it’s always reassuring to know that professional analysts who have studied all the matrices and news of a particular company support your choices.
Analyst ratings also help investors by pointing out which REITs have the highest potential upside relative to current prices. Here are three REIT stocks with the highest analyst upside predictions in the past 30 days, including one with huge upside potential of 236%:
Braemar Hotels & Resorts Inc. (NYSE: BHR) is a Dallas-based REIT that invests in hotels and luxury resorts across the US, from California to Pennsylvania and in Puerto Rico.
Braemar was recently upgraded by Deutsche Bank AG analyst Chris Woronka from $16 a share to $17. With Braemar recently at $5.05, that represents a huge potential gain of 236%. Refinitiv/Verus also recently upgraded Braemar from Hold to Buy, but with no price target.
Braemar has delivered revenue growth for the past four consecutive quarters and higher earnings per share (EPS) in three of those four quarters. The 52-week range is $4.06 to $6.64.
In 2019, Braemar paid a quarterly dividend of 16 cents, but then canceled the dividend until March 2022, when it was reinstated at one cent per share. For investors more interested in potential growth than income, Braemar could be a stock with a bright future.
Brandywine Realty Trust (NYSE: BDN) is a commercial REIT that owns, develops, leases and manages 175 properties from its hometown of Philadelphia to Austin, Texas.
Brandywine’s 52-week range is $7.82 to $14.88, but like so many other REITs, the stock’s price has fallen to a recent price of $8.09.
Over the past week, Truist Securities analyst Michael Lewis upgraded Brandywine stock from Hold to Buy and set an initial price target of $11. From the current price, this represents about 37% in upward pricing.
Brandywine’s quarterly dividend of 19 cents has been a steady but slow grower for the past five years, yielding over 9% annually. In the second quarter of 2022, funds from operations (FFO) of 34 cents were 2 cents better year on year. Revenue of $124.04 million was also higher than a year earlier. If the analyst is right, Brandywine could be a great REIT to own at this level.
See also: This little-known REIT has delivered double-digit annual returns for the past five years
Central America Apartment Communities Inc. (NYSE: MAA) is a REIT that acquires, rents, and manages apartment complexes. The Germantown, Tennessee firm controls more than 102,000 units, primarily in the Southeast, Southwest, and Midwestern United States
Even with high rents across America, Central America has seen its price plummet from $229 at the start of 2022 to $164 recently. Higher interest rates, as with other REITs, are responsible for this downturn.
Anthony Powell of Barclays recently maintained his overweight position in Central America and raised his price target from $211 to $215. In addition, Lewis of Truist Securities kept his buy position in Central America and raised his price target from $188 to $198. These target prices represent potential price increases of 29% and 19% respectively. It is clear that Central America will be well valued by analysts in the future.
However, investors are advised to use analyst ratings in addition to your own careful research, as even the most successful analysts are only right about 50% of the time.
Looking for high dividend yields without the price volatility?
Real estate is one of the most reliable sources of recurring passive income, but publicly traded REITs are just one option to access this income-generating asset class. Checking out Benzinga’s real estate coverage in the private market and find more ways to add cash flow to your portfolio without timing the market or falling victim to wild price swings.
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