Top 15 Real Estate Stocks Marvin Rates Most Attractive Now
Marvin's rules picked 15 Real Estate stocks, mostly REITs, that combine solid business quality with a high Opportunity score compared with their industry peers. Here is how each looks, with its figures and one caution.
Real Estate companies own, finance or develop property, from shopping centers and hotels to homes and mortgage portfolios. Most on this list are REITs, companies that pool money to own or finance property and pass much of their income to shareholders. Marvin's rules selected these 15 stocks, and this guide explains what their numbers show.
Each stock is ranked by its Opportunity score, which compares a company with others in its own industry. Because of that, a hotel REIT and a mortgage REIT are not judged against the same yardstick, and scores should not be read as a straight comparison across the list.
Keep in mind that some figures are missing for several companies. Mortgage REITs, for example, often lack margin data, and the sector tends to carry more debt than many others. Treat this as a starting point for your own research, not a recommendation to buy anything.
The list
How Marvin ranked these stocks
Marvin started with Real Estate companies above a minimum size and kept only those with a Business Quality score above a set floor. It then ranked them by Opportunity score, highest first, and allowed no more than four stocks from any one industry. Every score is relative to the company's own industry, so a high score means the company looks strong next to its direct peers today, not that it beats the whole market.
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 Opportunity score first, among companies with a Business Quality score of at least 50; at most 4 per industry.
The stocks, one by one
Ellington Financial Inc. EFC
Ellington Financial, a mortgage REIT, scores 96 overall with an Opportunity score of 97. Operating margin of 37.2% is strong, and revenue grew 10.1% last year. Caution: return on equity is a modest 9.9%, and free cash flow and debt figures are not available.
CareTrust REIT, Inc. CTRE
CareTrust REIT, a healthcare facilities REIT, grew revenue 60.8% last fiscal year, very fast, while debt-to-equity is low at 0.27. Return on equity is 7.9%. Caution: that is one year of growth, not a trend, and operating margin is not available.
CTO Realty Growth, Inc. CTO
CTO Realty Growth, a diversified REIT, shows gross margin of 74.7% and operating margin of 23.5%, with revenue growth of 20.1%. Caution: return on equity is only 2.4%, and debt-to-equity of 1.13 means it borrows more than several peers on this list.
Terreno Realty Corporation TRNO
Terreno Realty, an industrial REIT, pairs revenue growth of 24.5% with low debt-to-equity of 0.21. Return on equity of 8.8% is moderate. Caution: operating margin and cash flow margin are not available, so its profitability is harder to judge.
Adamas Trust, Inc. ADAM
Adamas Trust, a mortgage REIT, has a solid return on equity of 13.7%, and debt-to-equity of 0.46 is fairly modest. Caution: revenue growth and margin figures are missing, so we cannot see how fast the business is growing or how profitable its operations are.
Postal Realty Trust, Inc. PSTL
Postal Realty Trust, an office REIT, has an operating margin of 37.8% and revenue growth of 25.5%, with a Quality score of 89. Caution: return on equity is low at 5.2%, and debt-to-equity of 1.15 is on the higher side.
Host Hotels & Resorts, Inc. HST
Host Hotels & Resorts, a hotel REIT, has a Quality score of 93 and return on equity of 16.1%. Revenue grew 7.6%, a steady pace. Caution: operating margin of 14.6% is lower than many others here, and debt data is not available.
The St. Joe Company JOE
The St. Joe Company, a real estate developer, is the only pick with every figure available: free cash flow margin of 38.7%, operating margin of 30.2% and revenue growth of 27.4%. Caution: debt-to-equity of 0.49 is moderate, not zero.
MFA Financial, Inc. MFA
MFA Financial, a mortgage REIT, scores 90 overall and 92 on Opportunity, with return on equity of 8.3%. Caution: it has the least data on this list. Growth, margins and debt figures are not available, so the picture is incomplete.
Simon Property Group, Inc. SPG
Simon Property Group, a retail REIT, has an operating margin of 47.4% and modest revenue growth of 6.7%. Caution: debt-to-equity is 6.64, the highest here, and return on equity of 121.4% should be read with that heavy debt in mind.
Essential Properties Realty Trust, Inc. EPRT
Essential Properties Realty Trust, a diversified REIT, has an operating margin of 62.8% and revenue growth of 24.8%, with a Quality score of 96. Caution: return on equity is just 6.1%, and its Opportunity score of 87 is below the top names.
LTC Properties, Inc. LTC
LTC Properties, a healthcare facilities REIT, has an operating margin of 62.6%, revenue growth of 25.3% and return on equity of 10.7%. Caution: debt-to-equity of 0.61 is moderate, and its Quality score of 83 trails many others on the list.
EPR Properties EPR
EPR Properties, a specialty REIT, has a Quality score of 95, an 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 on the higher side.
Highwoods Properties, Inc. HIW
Highwoods Properties, an office REIT, has a high operating margin of 67.4%. Caution: revenue shrank, with growth of -2.4%, return on equity is low at 4.1%, and its Quality score of 61 is the lowest here. Debt figures are not available.
American Homes 4 Rent AMH
American Homes 4 Rent, a residential REIT, has a Quality score of 89, return on equity of 8.0% and debt-to-equity of 0.76. Caution: growth and margin figures are not available, and its Opportunity score of 88 is the lowest on this list.
Common questions
What is a REIT?
A REIT, or real estate investment trust, is a company that owns or finances property, such as apartments, warehouses, hotels or mortgages. REITs generally pay out much of their income to shareholders, which is why many investors look at them. Most stocks on this list are REITs.
What do Marvin's Quality and Opportunity scores mean?
The Quality score describes how strong a company's business looks, using things like profitability and financial health. The Opportunity score is a separate measure. Both compare a company only with others in its own industry, and neither is a forecast of future returns.
Why are some figures missing for certain stocks?
Not every company reports every measure in a way that fits the same format. Mortgage REITs, for instance, often do not have a standard operating or gross margin. When a figure is missing, it is better to look at the company's own reports than to assume anything about it.
Keep reading
- Top 20 REIT Stocks by Marvin Score
- Top 15 Real Estate Stocks Ranked by Marvin Scores
- Top 15 Real Estate Companies With the Strongest Businesses
- Top 15 Mortgage REIT Stocks by Marvin Score
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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.