Top 15 Real Estate Companies With the Strongest Businesses
Marvin's rules picked 15 Real Estate companies with the highest Business Quality scores, from healthcare to hotel REITs, with at most four per industry. Scores compare each company with its own industry peers.
Real Estate companies range from landlords that collect rent to firms that develop land or provide property services. Marvin looked at the Real Estate sector and listed 15 companies whose businesses score best on Business Quality, which compares a company with others in its own industry.
Many of these companies are REITs, or real estate investment trusts. A REIT is a company that owns or finances property, and each REIT type has its own typical numbers. Debt, margins and returns are not always comparable across types, so a figure that looks weak in one industry may be normal in another.
Some figures are missing for certain companies because not every measure fits every business model. Each pick below notes one caution, so read it alongside the strengths. These scores describe the business today and are not a forecast or a recommendation.
The list
How Marvin ranked these stocks
Marvin included companies above about a minimum size threshold and ranked them by Marvin scores, which run from 0 to 100. Within the Real Estate sector, the highest Business Quality score comes first, and at most four companies from any one industry are included. Every score is relative to the company's own industry, so a high score means a company looks strong against similar businesses, not against all stocks.
Companies above about $300 million in size, ranked by Marvin scores (0-100, relative to each company's own industry). The Real Estate sector, highest Business Quality score first; at most 4 per industry.
The stocks, one by one
CareTrust REIT, Inc. CTRE
This healthcare-facilities REIT has a Business Quality score of 96 and revenue growth of 60.8% last fiscal year, the fastest among these 15. Debt-to-equity is low at 0.27. Caution: return on equity is only 7.9%, and margin data is not available.
Ellington Financial Inc. EFC
Ellington Financial, a mortgage REIT, scores 96 on quality, with an operating margin of 37.2% and revenue growth of 10.1%. That points to a profitable, steadily growing business. Caution: debt-to-equity is not available, so its borrowing level cannot be judged here, and return on equity is 9.9%.
Essential Properties Realty Trust, Inc. EPRT
Essential Properties Realty Trust pairs a quality score of 96 with a high operating margin of 62.8% and revenue growth of 24.8%. Debt-to-equity of 0.67 is moderate. Caution: return on equity is modest at 6.1%.
Agree Realty Corporation ADC
Agree Realty, a retail REIT, has a quality score of 96, an operating margin of 47.9% and revenue growth of 16.4%. Caution: return on equity is low at 3.4%, and its Opportunity score of 53 is much lower than its quality score.
EPR Properties EPR
EPR Properties scores 95 on quality, with a healthy operating margin of 55.1% and return on equity of 11.4%. Caution: revenue growth was only 2.9%, and debt-to-equity of 1.53 is the highest among these 15 picks.
American Homes 4 Rent AMH
American Homes 4 Rent, a residential REIT, has a quality score of 89 and an Opportunity score of 88. Return on equity is 8.0% and debt-to-equity is 0.76, a moderate level. Caution: revenue growth and margin figures are not available, so the picture is incomplete.
EastGroup Properties, Inc. EGP
EastGroup Properties, an industrial REIT, shows a quality score of 95, revenue growth of 12.7% and return on equity of 8.5%. Debt-to-equity of 0.45 is on the low side. Caution: no margin figures are available, so profitability on sales cannot be checked.
Easterly Government Properties, Inc. DEA
Easterly Government Properties, an office REIT, has a quality score of 94, a gross margin of 77.3% and revenue growth of 11.3%. Caution: return on equity is just 0.8%, debt-to-equity is 1.30, and the Opportunity score of 47 is low.
FRP Holdings, Inc. FRPH
FRP Holdings has a quality score of 94 and debt-to-equity of 0.50, a modest level. Caution: its free cash flow margin is negative at -95.1%, return on equity is just 0.0%, and its Opportunity score is only 4.
Host Hotels & Resorts, Inc. HST
Host Hotels & Resorts, a hotel REIT, scores 93 on quality, with return on equity of 16.1% and revenue growth of 7.6%. Caution: its operating margin of 14.6% is far lower than most property owners here, and debt-to-equity is not available.
NNN REIT, Inc. NNN
NNN REIT, a retail REIT, has a quality score of 92 and a high operating margin of 62.3%. Return on equity is 8.6%. Caution: revenue growth was modest at 6.6%, and debt-to-equity is not available.
The St. Joe Company JOE
St. Joe, a real estate developer, has the most complete data here: a quality score of 92, operating margin of 30.2%, free cash flow margin of 38.7% and return on equity of 16.1%. Caution: revenue growth of 27.4% is one year of data and may not be steady.
VICI Properties Inc. VICI
VICI Properties, a diversified REIT, shows a quality score of 87, a very high gross margin of 99.3% and return on equity of 9.5%. Caution: revenue growth was modest at 4.1%, and its Opportunity score is 57.
Jones Lang LaSalle Incorporated JLL
Jones Lang LaSalle, a real estate services firm, has a quality score of 90, return on equity of 13.4% and revenue growth of 11.4%. Debt-to-equity is 0.49. Caution: its operating margin is thin at 4.7%, which is common for service businesses.
Postal Realty Trust, Inc. PSTL
Postal Realty Trust, an office REIT, has a quality score of 89, revenue growth of 25.5% and an operating margin of 37.8%. Caution: return on equity is only 5.2%, and debt-to-equity of 1.15 is higher than many peers on this list.
Common questions
What is a REIT?
A REIT, or real estate investment trust, is a company that owns or finances property. Many are set up to pass most of their income on to shareholders. Most companies in this list are REITs, and the type of property they hold shapes their numbers.
Does a high Business Quality score mean a stock is a good investment?
No. The score describes how a company's business compares with others in its industry today. It does not say whether the stock price is fair or where it is headed. Readers should do their own research.
Why are some figures missing for certain companies?
Not every measure fits every business model, and some companies do not report certain figures in a comparable way. When a figure is missing, Marvin leaves it out instead of guessing, so check the other numbers and the caution in each blurb.
Keep reading
- Top 20 REIT Stocks by Marvin Score
- Top 15 Real Estate Stocks Ranked by Marvin Scores
- Top 15 Real Estate Stocks Marvin Rates Most Attractive Now
- Top 20 Mid-Cap Stocks Right Now, Ranked by Marvin Scores
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Marvin's scores (0-100) compare each company with others in its industry today. Growth and margin figures come from SEC filings. This is general information, not personal investment advice or a recommendation to buy or sell anything. Do your own research.