In this article, we will look at the 10 best real estate stocks to buy. If you want to explore similar stocks, you can also take a look at 5 Best Real Estate Stocks To Buy.
Real estate investing can be a great way to build wealth for the long term, as well as to generate passive income. For those with the means and the knowledge, investing in real estate can provide an incredible opportunity to make money. When it comes to investing in real estate, there are multiple options available. You can buy a property outright to rent out, you could purchase a property to fix and flip, you could invest in a REIT or real estate crowdfunding platform, or you could become a landlord. With each option, there are pros and cons that should be considered before making a decision.
For those starting out, investing in rental properties is a great way to begin building a portfolio. Rental properties can generate an ongoing stream of income while also increasing in value as the market fluctuates. However, it’s important to remember that being a landlord comes with its own set of responsibilities, such as finding and maintaining tenants, dealing with late payments, and understanding the laws and regulations related to rental properties. For those with more capital to invest, buying and flipping a property can be a very lucrative option. This involves buying a property, often at a discounted price, fixing it up and then reselling it for a profit.
23% Of Americans Prefer Real Estate To Acquire Wealth, But Only 12% Invested
According to a CNBC Make It: Your Money survey, 38% of Americans voted in favor of generating passive income from rental properties. 15% of respondents preferred dividend stocks and 11% of respondents voted for investing in fixed-income assets to acquire wealth. 23% of survey respondents reported that investing in real estate is the ideal way to build wealth, while 16% of respondents preferred investing in the stock market. The findings of this survey suggest that real estate is considered to be the best way to build wealth. However, in 2022, 27% of respondents reportedly invested in the stock market and only 12% invested in real estate.
Nicholas Bunio, a certified financial planner, told CNBC that “in real estate, it takes money to make money”. CNBC further noted that U.S. home prices rose 10% year over year in October 2022, however, equities tumbled by over 15% year over year in October 2022. In history, stocks have delivered stellar returns and have outperformed inflation in the long-term. However, investing in real estate, according to certified financial planner Kevin Brady, has shown that “long-term returns often match or barely exceed inflation”. Kevin Brady further told CNBC that investors “need a healthy allocation to stocks”.
Real Estate Stocks: The Best of Both Worlds
While real estate investing is a decent way to build wealth, it can be intimidating for beginners and investors with limited capital. Real estate stocks provide investors with a way to gain exposure to the real estate market without having to purchase physical real estate and therefore overcome barriers to entry.
Real estate stocks can provide investors with exposure to real estate investment trusts (REITs), which are companies that own and manage real estate properties. REITs typically pay dividends to investors and are often more liquid than buying and managing physical real estate.
Real estate stocks can also provide real estate investors with exposure to the stock market, which can provide returns that are not correlated to the real estate market. By investing in real estate stocks, investors can participate in the stock market and benefit from stock market gains without having to take on the risk of owning physical real estate. This piece will discuss some of the best real estate stocks to buy now which include Jones Lang LaSalle Incorporated (NYSE:JLL), CBRE Group Inc (NYSE:CBRE), and Cushman & Wakefield plc (NYSE:CWK).
Photo by Breno Assis on Unsplash
Our Methodology
To determine the best real estate stocks to buy, we studied the real estate industry and identified market leaders. We carefully studied these companies and looked at their operating history, balance sheets, portfolios. We narrowed down our selection to stocks with positive market sentiment. Along with each stock, we have mentioned the hedge fund sentiment, analyst ratings, and salient features that make them good investment options for investors looking to increase their exposure to the real estate sector. These stocks are ranked according to their popularity among elite money managers, from least to most.
Real Estate Investing For Beginners: 10 Best Stocks To Buy
10. FirstService Corporation (NASDAQ:FSV)
Number of Hedge Fund Holders: 12
FirstService Corporation (NASDAQ:FSV) is a well–diversified provider of property and financial services with a strong track record of growth and profitability. The company has a strong balance sheet and has been able to return capital to shareholders. On November 29, FirstService Corporation (NASDAQ:FSV) declared a quarterly cash dividend of $0.2025 per share. The dividend is payable on January 6 to stockholders of record on December 30. As of December 16, the company is offering a forward dividend yield of 0.67%. FirstService Corporation (NASDAQ:FSV) is one of the best real estate stocks to buy now.
As of September 27, Scotiabank analyst Michael Doumet has an Outperform rating and $135 price target on FirstService Corporation (NASDAQ:FSV).
At the end of Q3 2022, FirstService Corporation (NASDAQ:FSV) was a part of 12 investors’ portfolios that held stakes worth $659.2 million in the company. Of those, Durable Capital Partners is the top shareholder in the company and has a position worth $465 million.
Some of the best real estate stocks that are popular among elite money managers include Jones Lang LaSalle Incorporated (NYSE:JLL), CBRE Group Inc (NYSE:CBRE), and Cushman & Wakefield plc (NYSE:CWK).
9. Tricon Residential Inc. (NYSE:TCN)
Number of Hedge Fund Holders: 13
Tricon Residential Inc. (NYSE:TCN) focuses on the acquisition, ownership and management of single-family and multi-family residential properties in the United States and Canada. Tricon Residential Inc. (NYSE:TCN) is one of the best real estate stocks and is trading at bargain levels currently. The company is also offering a hefty dividend to shareholders. As of December 16, Tricon Residential Inc. (NYSE:TCN) is trading at a PE multiple of 3x and is offering a dividend yield of 2.90%.
On October 24, National Bank analyst Tal Woolley revised his price target on Tricon Residential Inc. (NYSE:TCN) to C$15 from C$18 and maintained an Outperform rating on the shares.
At the close of Q3 2022, Tricon Residential Inc. (NYSE:TCN) was spotted on 13 hedge funds’ portfolios. The total stakes of these hedge funds were valued at $41.79 million. As of September 30, Millennium Management is the largest investor in the company and has disclosed a position worth $9.4 million.
8. Marcus & Millichap, Inc. (NYSE:MMI)
Number of Hedge Fund Holders: 13
Marcus & Millichap, Inc. (NYSE: MMI) is a leading real estate investment services firm with offices throughout the United States and Canada. Since 1971, Marcus & Millichap, Inc. (NYSE:MMI) has been providing investment sales, financing, research, and advisory services to both institutional and private investors. The firm specializes in multifamily, retail, office, industrial, and hospitality properties. The stock is placed on our list of the best real estate stocks.
Shares of Marcus & Millichap, Inc. (NYSE: MMI) have pulled back and are presenting a buying opportunity. As of December 16, the stock is trading at a PE multiple of 8x and is offering a yield of 1.47%.
At the close of the third quarter of 2022, 13 hedge funds were bullish on Marcus & Millichap, Inc. (NYSE: MMI) and held stakes worth $86 million in the company. Of those, Royce & Associates was the largest shareholder and held a position worth $67.4 million.
7. Colliers International Group Inc (NASDAQ:CIGI)
Number of Hedge Fund Holders: 15
Colliers International Group Inc (NASDAQ:CIGI) is a global leader in commercial real estate services. The company offers a full range of services to investors, owners, tenants and developers, including capital markets, corporate services, facility and project management, leasing, and valuation and advisory services. Colliers International Group Inc (NASDAQ:CIGI) has over 18,000 professionals operating in 63 countries.
On December 6, Colliers International Group Inc (NASDAQ:CIGI) declared a semi-annual cash dividend of $0.15 per common share. The dividend is payable on January 13 to shareholders of record on December 30. As of December 16, Colliers International Group Inc (NASDAQ:CIGI) is offering a dividend yield of 0.34%. Colliers International Group Inc (NASDAQ:CIGI) is among the best real estate stocks to buy now.
This December, Goldman Sachs analyst Chandni Luthra upgraded Colliers International Group Inc (NASDAQ:CIGI) to Buy from Neutral and maintained her $119 price target on the shares.
At the close of Q3 2022, 15 hedge funds were long Colliers International Group Inc (NASDAQ:CIGI) and disclosed positions worth $352.2 million in the company. As of September 30, BloombergSen is the dominant shareholder in the company and has a position worth $139.6 million.
Here is what LRT Capital had to say about Colliers International Group Inc. (NASDAQ:CIGI) in its October investor letter:
“Colliers International Group Inc. (NASDAQ:CIGI) is a commercial real estate brokerage and investment management company founded by Jay S. Hennick in 1976 in Toronto, Canada. From humble beginnings the company has grown, primarily through acquisitions, to become one of the five largest commercial real estate brokerages in the world (the others being CBRE, Jones Lang LaSalle, Cushman & Wakefield, and Savills). The company today offers a full range of services and reports in the following segments: Outsourcing & Advisory (45% of revenue; this includes Engineering & Design services, Valuation services and Property Management), Capital Markets (25% of revenue), Commercial Real Estate Leasing (24% of revenue), and Investment Management (6% of revenue). The company believes that about half of its revenue is recurring in nature. The Investment Management segment deserves special attention, as it is the result of an acquisition of the real estate investment management company Harrison Street in 2018. While the segment contributes the smallest part of revenues, it has a very high margin, contributing over 17% of the company’s EBITDA…” (Click here to read the full text)
6. Kennedy-Wilson Holdings, Inc. (NYSE:KW)
Number of Hedge Fund Holders: 15
Kennedy-Wilson Holdings, Inc. (NYSE:KW) is a real estate investment and services company based in Beverly Hills, California. Founded in 1977, the company operates in the United States, Europe, and Japan. The company focuses on acquiring, managing, and investing in real estate, as well as providing real estate-related services.
On November 2, Kennedy-Wilson Holdings, Inc. (NYSE:KW) posted earnings for the fiscal third quarter of 2022. The company reported an EPS of $0.12 and outperformed estimates by $0.09. The company’s revenue for the quarter amounted to $139.60 million, up 22.03% year over year.
Wall Street is bullish on Kennedy-Wilson Holdings, Inc. (NYSE:KW). As of September 27, Deutsche Bank analyst Derek Johnston has a $21 price target and Buy rating on Kennedy-Wilson Holdings, Inc. (NYSE:KW). The stock is placed sixth on our list of the best real estate stocks.
At the end of Q3 2022, 15 hedge funds disclosed positions in Kennedy-Wilson Holdings, Inc. (NYSE:KW). The total value of these stakes amounted to $391.9 million. As of September 30, Fairfax Financial Holdings is the top investor in the company and has stakes worth $205.9 million.
Like Jones Lang LaSalle Incorporated (NYSE:JLL), CBRE Group Inc (NYSE:CBRE), and Cushman & Wakefield plc (NYSE:CWK), Kennedy-Wilson Holdings, Inc. (NYSE:KW) is a leader in the real estate space and is well-placed to maintain its position.
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Disclosure: None. Real Estate Investing For Beginners: 10 Best Stocks To Buy is originally published on Insider Monkey.
