| Stock | Price | 52 Week Range | Marketcap | EPS | Dividend Yield | Chart (24H) | Sector | Employees | Last Updated |
|---|---|---|---|---|---|---|---|---|---|
| $27.36 | 3.82B | 0.28 | 0.00% | Industrials | 18,000 | 1 min ago | |||
| $9.05 | 457.01M | 0.22 | 3.05% | Real Estate | 17 | 1 min ago | |||
 278938 SFI | $0.0000 | 0.0000 | 0.00 | 0.00% | 0 | 5 years ago |
As Wall Street turns increasingly bearish on the REIT sector, particularly targeting larger real estate investment trusts (REITs), a remarkable oversight unfolds. Despite the overarching negativity surrounding REITs, smaller and specialty REITs remain well-positioned with robust fundamentals and attractive growth prospects. This article delves deep into why investors should selectively approach the REIT market, focusing on undervalued gems like Geo Group (GEO), Chatham Lodging (CLDT), and iStar Financial (SFI), each showcasing strong performance and high Portfolio Grader rankings.
Why This Matters to You
Every discerning investor seeks undervalued stocks with high growth potential. While large REITs face challenges, numerous smaller, specialty REITs shine with robust fundamentals. This presents unique investment opportunities that deserve your attention. Let’s explore three standout REITs: Geo Group, Chatham Lodging, and iStar Financial, backed by solid metrics and Portfolio Grader rankings.
Editor's Note: Analysis and insight for this article were originally sourced from our friends at InvestorPlace
Geo Group (GEO): Capturing Government Outsourcing Trends
Geo Group (GEO) emerges as a prime example of a specialty REIT with outstanding fundamentals. This company provides essential prison management services in the United States, Australia, Canada, and the United Kingdom. With governments at all levels striving to cut costs, outsourcing services like prison management have become increasingly common. Geo Group stands to benefit immensely from this trend.
Why Geo Group Stands Out
Geo Group has been on the receiving end of positive analyst revisions, underlining substantial earnings growth and strong business momentum. These factors are crucial for any stock’s appreciation potential. Our trusted Portfolio Grader conferred a “buy” rating on GEO, further bolstered by an impressive yield of over 5%. By focusing on superior fundamentals, Geo Group offers both stability and a promising growth trajectory, unlike its larger, struggling counterparts.
Analyst Ratings for Geo Group (GEO):
| Category | Rating/Value |
|---|---|
| Consensus Rating | Hold |
| Average Price Target | $13.50 |
| Potential Gain | 15.1% |
| Number of Ratings | 6 |
Summary of Analysts’ Outlook:
Analysts have a mixed outlook on Geo Group, with a consensus rating of “Hold”. While some analysts believe the company’s diversified revenue streams and cost-cutting initiatives will drive growth, others are concerned about the impact of declining occupancy rates and regulatory headwinds on the company’s financials. Overall, analysts expect GEO to post modest growth in the near term, but with limited upside potential.
Chatham Lodging (CLDT): Riding High on Hospitality Recovery
Next up is Chatham Lodging (CLDT), a REIT specializing in upscale extended-stay hotels across the United States. Owning 20 hotels outright and holding a minority interest in a joint venture comprising 52 more, Chatham recently reported stellar first-quarter performance. With significant increases in EBITDA and funds from operations, the company outperformed estimates across the board.
Chatham’s Winning Strategy
Chatham’s strategy extends beyond operational success. The company judiciously refinanced some of its debt on very favorable terms and completed an equity offering to fund the acquisition of two new hotels. These financial maneuvers have left Chatham well-positioned for future growth. It’s no wonder Portfolio Grader has upgraded the stock to an “A” rating, making it a resounding “strong buy.” As the hospitality sector recovers, Chatham’s focus on extended-stay properties in the upscale segment promises lucrative returns for investors.
Analyst Ratings for Chatham Lodging Trust (CLDT):
| Metric | Value |
|---|---|
| Consensus Rating | Hold |
| Average Price Target | $14.33 |
| Potential Gain | 12.1% |
| Number of Ratings | 7 |
Analysts’ Outlook:
Analysts have a neutral outlook on Chatham Lodging Trust, with a majority of them rating it as a “Hold”. The average price target suggests a potential gain of 12.1% from the current price. While some analysts see upside in the stock, others are cautious due to the current macroeconomic environment and the impact of COVID-19 on the hospitality industry.
iStar Financial (SFI): Profiting From Commercial Market Resurgence
iStar Financial (SFI) is another REIT making waves, this time in the commercial real estate sector. Involved in providing capital to both corporate and private users of high-end commercial property, iStar lends money for commercial projects, owns triple net leased properties, and operates a diverse portfolio of commercial properties. As the commercial real estate market recovers, so too have iStar’s fundamentals strengthened.
iStar’s Edge in Commercial Real Estate
iStar’s balanced approach and strategic positioning have earned it a “B” rating from Portfolio Grader, making it a solid “buy.” By maintaining a diverse portfolio and proactive financial management, iStar Financial offers a compelling investment opportunity. If you’re keen on a REIT benefiting from industry resilience and favorable growth projections, iStar’s promising fundamentals and market outlook make it an attractive pick.
Analyst Ratings for iStar Financial (SFI):
| Metric | Value |
|---|---|
| Consensus Rating | Overweight (4.33/5) |
| Average Price Target | $435.50 |
| Potential Gain | 10.3% |
| Number of Ratings | 14 |
Summary of Analysts’ Outlook:
Analysts have a positive outlook on SFI, with a consensus rating of Overweight. The average price target suggests a potential gain of 10.3% from the current price. The majority of analysts recommend buying or holding the stock, citing the fund’s diversified portfolio and tracking of the S&P 500 Index.
Why You Should Pay Attention
Wall Street’s monolithic bearish stance on REITs, particularly larger ones, ignores the nuanced performance of smaller and specialty REITs. Louis Navellier, a respected voice in investment, emphasizes not falling into the trap of groupthink that lumps all REITs together. While the broader sentiment might be negative, Geo Group, Chatham Lodging, and iStar Financial stand out with their solid fundamentals and promising outlook.
By turning your attention to these high-potential specialty REITs, you can uncover significant returns that mainstream trends might miss. Remember, despite the doom and gloom surrounding REITs, not all are created equal. In the world of REITs, while some may falter, others shine brightly, offering lucrative opportunities for astute investors.
Stay vigilant, invest smartly, and always look beyond the broad strokes to find the hidden gems in the REIT sector.
