What’s better is these top REITs to buy also trade at very attractive valuations for the same reasons. These companies are still cheap, as most of the market has turned toward more attractive and riskier options such as Nvidia (NASDAQ:NVDA) or other growth stocks in pursuit of capital appreciation.
So for those of you who want to scoop up some undervalued income-producing shares, here are three top REITs to buy for March this year.
Prologis (PLD)
Prologis (NYSE:PLD) is the largest industrial and warehouse REIT, indirectly capitalizing on e-commerce growth.
In the fourth quarter of 2023, the company reported funds from operations (FFO) per share of $5.61, up 8.7% from the previous year. Rental revenues also surged by 38.8% year-over-year, amounting to $6.82 billion, slightly below the consensus estimate. Additionally, the company sustained an average occupancy level of 97.1% across its owned and managed portfolio during this period.
But looking ahead, it provided optimistic guidance, projecting core FFO per share in the range of $5.42 to $5.56. Plus, it has a consistent record of increasing its dividend, with a five-year annualized dividend growth rate of 13.6%.
The company’s dividend yield is around 2.9% at the time of writing. So although it may not meet the immediate income needs of many retirees, it could be a solid pick for investors to consider who have a long time horizon.
Boston Properties (BXP)
Boston Properties (NYSE:BXP) specializes in office spaces across key U.S. cities.
As with the other top REITs to buy in this article, BXP’s short-term outlook is also expected to be accretive. It has set a positive outlook for Q1 2024, expecting FFO per share to range between $1.72 and $1.74, surpassing the anticipated $1.69. For the full year, the FFO per share is projected to be between $7 and $7.20, aligning closely with the consensus of $7.18.
Meanwhile, the company’s Q4 2023 performance exceeded expectations, with FFO per share of $1.82 and revenue of $828.9 million.
BXP is more income-oriented, as it offers a dividend yield of 6%. However, it should be noted this comes with the tradeoff of a lower dividend growth rate, which is around 3% over the past five years.
Those who need the extra income could consider BXP, otherwise for the growth-focused investor, there are more suitable opportunities elsewhere.
Extra Space Storage (EXR)
Extra Space Storage (NYSE:EXR), is a leading self-storage REIT. I also think its a strong contender for one of those top REITs for investors to consider. Part of this thesis is due to its strong results in the previous quarter. In Q4 2023, EXR reported FFO per share at $2.02 and same-store revenue growth of 0.8%. The company has also been proactive in expanding its portfolio, adding 74 third-party managed stores and eight stores through acquisitions. For this year, it has provided a core FFO guidance range of $7.85 to $8.15 per share.
What I like about EXR also comes from it retaining a solid balance sheet with a low and safe net debt to EBITDA ratio of 5.0x. Ratings agencies consider a ratio below the 6.0x level as safe.
The company may also appeal to income investors as well as those seeking dividend growth, as it currently gives investors the best of both worlds. Its dividend yield is 4.5%, while its dividend growth rate is higher at 5.9%.
This presents it as an attractive option for its flexibility and balance sheet safety. It also makes it one of those top REITs to buy.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.