5 Best Real Estate Stocks to Buy Now

In this article, we discuss the 5 best real estate stocks to buy now. If you want to see more stocks in this selection, go to the 12 Best Real Estate Stocks to Buy Now.

5. Equinix, Inc. (NASDAQ:EQIX)

Number of Hedge Fund Holders: 38

Equinix, Inc. (NASDAQ:EQIX) is a California-based digital infrastructure company that was founded in 1998. It is a leading data center REIT globally.

On October 12, Matthew Niknam at Deutsche Bank gave Equinix, Inc. (NASDAQ:EQIX) stock a target price of $635, along with a Buy rating. The analyst noted that the data center stocks are weighed down by increasing power costs and recession-related fears. However, experts believe that the top-line trends of Equinix, Inc. (NASDAQ:EQIX) are strong due to its superior brand power along with premium positioning in the industry. Equinix, Inc. (NASDAQ:EQIX) has a multi-region presence and the conversion towards a REIT has provided the corporation with a sustainable, tax-efficient structure for the long run. The stock’s forward annual dividend yield stands at 2.18% as of October 28.

Baron Funds shared its outlook on Equinix, Inc. (NASDAQ:EQIX) in its Q2 2022 investor letter. Here’s what the firm said:

“Equinix, Inc. is a network dense global data operator of over 240 data centers in 69 metros and 30 countries. Its customers place high value on the ecosystem of customers that Equinix has curated within its data centers over many years so that they are able to interconnect within the data center facility instead of having data travel through the public internet (latency sensitive applications as well as data security considerations). Customers value the global network with 90% of customers in multiple metropolitan areas and 75% in multiple geographic regions.

Equinix has a diverse but valuable customer base with no single customer greater than 2.6% of recurring monthly revenues. COVID-19 has accelerated digital transformation priorities for many organizations, and we believe that Equinix will be poised to benefit from: i) organic growth through new bookings and pricing power (the majority of incremental bookings are from existing customers); ii) growth of high margin cross-connect revenue (approximately 20% of total); and iii) continued geographic expansion through development and select M&A. We believe the combination of these factors will allow the company to grow annual cash flow in the high singledigit range.”

4. Simon Property Group, Inc. (NYSE:SPG)

Number of Hedge Fund Holders: 45

Simon Property Group, Inc. (NYSE:SPG) is an Indianapolis, Indiana-based REIT that owns, operates, and leases shopping malls and community and lifestyle centers.

Craig Mailman at Citi opened a “30-day positive Catalyst Watch” on Simon Property Group, Inc. (NYSE:SPG) before its Q3 2022 earnings. The Street anticipates the company to report revenue and FFO per share of $1.27 billion and $1.54, respectively. Mailman thinks that Simon Property Group, Inc.’s (NYSE:SPG) valuation can attract generalist investors as it is trading at a discount compared to its historical levels and the broader REIT sector. The analyst also thinks that Simon Property Group, Inc.’s (NYSE:SPG) forward dividend yield of 6.9% as of October 28 is well-covered.

Baron Funds shared its stance on Simon Property Group, Inc. (NYSE:SPG) in its Q1 2022 investor letter. Here’s what the firm said:

“Following a share price gain of more than 97% in 2021, we recently trimmed the Fund’s holdings in Simon Property Group, Inc. (NYSE:SPG), the largest and premier mall operator in the U.S. Though we are also tempered by the expectation for modest earnings growth in 2022, we remain optimistic about the company’s long-term prospects. Simon owns A-quality malls in A-quality geographic locations. We expect Simon to benefit from the ongoing economic recovery and believe management is well positioned to acquire real estate assets given its strong balance sheet and low cost of capital.”

3. Crown Castle Inc. (NYSE:CCI)

Number of Hedge Fund Holders: 48

Crown Castle Inc. (NYSE:CCI) is a Houston, Texas-based REIT that provides shared communications infrastructure. The company has over 40,000 cell phone towers and offers 85,000 miles of fiber optics services.

Crown Castle Inc. (NYSE:CCI) stock offers an attractive forward dividend yield of over 5% as of October 28. In a research note issued on October 21, Gregory Williams at Cowen gave Crown Castle Inc. (NYSE:CCI) stock an Outperform rating along with a target price of $149. The analyst noted that the company reported strong Q3 2022 results. Crown Castle Inc. (NYSE:CCI) generated revenue and adjusted FFO per share of $1.75 billion and $1.85, respectively, which outperformed consensus forecasts of $1.74 billion and $1.83.

Furthermore, Crown Castle Inc. (NYSE:CCI) observed its top line rise by 8% YoY, while tower leasing rose by 6% YoY. The company expects to achieve the target of 4% organic revenue growth during the next year, making it one of the best real estate stocks to invest in right now.

Here’s what ClearBridge Investment said about Crown Castle Inc. (NYSE:CCI) in its Q1 2022 investor letter:

“U.S. communications company Crown Castle International (NYSE:CCI) was the largest detractor from quarterly performance. Crown Castle is the leading independent owner and operator of wireless communications infrastructure in the U.S. with a portfolio of approximately 40,000 towers. The stock underperformed as, driven by rising interest rates, investors rotated away from defensive into more value-oriented sectors. Communications infrastructure remains attractive, however, as companies continue to deploy greater capital spend to support the strong tailwinds from 5G.”

2. Prologis, Inc. (NYSE:PLD)

Number of Hedge Fund Holders: 49

Prologis, Inc. (NYSE:PLD) is a San Francisco, California-based REIT that is focused on delivering logistics solutions by developing, and operating one of the biggest networks of logistics real estate in the world.

On October 24, Jeffrey Spector at Bank of America gave Prologis, Inc. (NYSE:PLD) stock a Buy rating and a target price of $140. The target price reflects a potential upside of over 35% from the closing price as of October 28. Spector noted that the company reported a strong outperformance on the core results for Q3 2022. The leasing spreads rose to 38.5% during Q3, and the analyst positively welcomed the increase in the company’s same-store net operating income (NOI) forecast.

The stock offers an annual forward dividend yield of 2.88% as of October 28. Analysts think Prologis, Inc. (NYSE:PLD) is one of the best real estate stocks as it has considerable pricing power, allowing it to maintain its growth levels and generate solid shareholder returns in the future.

Carillon Tower Advisers shared its stance on Prologis, Inc. (NYSE:PLD) in its Q2 2022 investor letter. Here’s what the firm said:

“Prologis, Inc. (NYSE:PLD) underperformed due to supply and demand concerns following the announcement that a major online retailer is slowing the rollout of new warehouses. However, we continue to believe that there is overwhelming demand for the company’s assets.”

1. American Tower Corporation (NYSE:AMT)

Number of Hedge Fund Holders: 52

American Tower Corporation (NYSE:AMT) is a Boston, Massachusetts-based REIT that owns, develops, and operates multi-tenant wireless and broadcast communications real estate. The company has a portfolio of nearly 222,000 communication sites. American Tower Corporation (NYSE:AMT) has secured the first position on our list of the 12 best real estate stocks to buy now.

Eric Luebchow at Wells Fargo gave American Tower Corporation (NYSE:AMT) stock a target price of $235 and reiterated an Overweight rating in an update issued to investors on October 18. The analyst suggests going long on American Tower Corporation (NYSE:AMT) stock despite some downward revision in estimates due to interest rate hikes and adverse foreign exchange impact.

On October 27, investment firm Stonepeak revealed its plans to invest a further $570 million in the US data center business of American Tower Corporation (NYSE:AMT). The firm had previously invested $2.5 billion in the company, reflecting its bullish long-term outlook on the stock. American Tower Corporation (NYSE:AMT) pays an annual dividend of $5.88, translating into a forward yield of 2.87% as of October 28.

Here’s what ClearBridge Investments said about American Tower Corporation (NYSE:AMT) in its Q2 2022 investor letter:

“The top contributor was our sole real estate holding American Tower (NYSE:AMT), the leading independent wireless tower operator with roughly 221,000 properties globally, including about 43,000 in the U.S., 76,000 in India and 23,000 in Brazil. The company’s business model is to lease space on its towers to predominantly wireless carriers on a long-term basis, generally ranging 5–10 years in duration, with built-in price escalators. This approach results in a stable and predictable cash flow business with high incremental margins — attractive qualities especially in volatile markets like the second quarters.”

You can also take a peek at the 15 Biggest Internet Companies in the World and the 15 Biggest Cell Phone Companies in the World.

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