REITs Performance in 2018

In this edition of Value Reports, we examine the Top 25 REITs ranked by Total Assets

In this environment of rising interest rates (which started in Q4 2014), we explore the performance of REITs relative to the S&P 500. To illustrate the industry’s performance in this environment Economatica chose the Top 25 REITs ranked by Total Assets and examined several key metrics.

As can be observed from the 5-year table below the median returns for this group relative to the S&P 500 have ranged from negative 3.76% in the 1-year return to positive 6.77% in the 5-year return.

On an individual basis there are a handful of companies which have performed well despite the pressures of interest rates and other factors. The companies with the highest YTD returns relative to the S&P 500 are HCP (15.05%), Welltower (13.83%), and Realty Income Corp (12.65%). More important are those companies which have outperformed the market since interest rates began to move upwards four years ago.

Taking first place is New Residential Investment with a 4 year cumulative return relative to the S&P 500 of 69.64%. Equinix takes second place with a return of 47.94% and Digital Realty Trust places third with 43.43%.

Dividend Yield and Dividend Paid per Share have remained stable and consistent throughout this period.

The indicators Return on Assets (ROA) and EBIT/Net Interest Expense, two key evaluation metrics for REITs, have shown slight improvement during this period.

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