Real Estate Sector Ideas

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Crown Castle, Medical Properties Trust - >>> 3 Unstoppable REIT Stocks to Buy in April


Motley Fool

By Kody Kester

Apr 2, 2022


https://www.fool.com/investing/2022/04/02/3-unstoppable-reit-stocks-to-buy-in-april/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


KEY POINTS

Crown Castle's infrastructure is essential to large telecom stocks like Verizon and T-Mobile.

Medical Properties Trust owns a leading portfolio of hospital real estate around the world.

STORE Capital's real estate portfolio is spread across all U.S. states but one.


These high-yielding dividend stocks each appear to be no-brainer buys.

There has been no shortage of market volatility through the first three months of this year. After dropping by more than 10% and entering into a correction on Feb. 22, the S&P 500 index has clawed most of the way back.

The index is only 4% off of its 52-week high. But some of the highest-quality dividend stocks are still trading well below their 52-week highs. Let's take a look at three high-yielding real estate investment trusts (REITs) that are still in corrections, which could be great buying opportunities in April.

1. Crown Castle International

As you're reading this article, there's a nearly 50% chance that you are doing so on your smartphone. This is supported by the fact that mobile devices accounted for 47.3% of U.S. web traffic in the fourth quarter of last year.

Although its name doesn't reflect it, Crown Castle International ( CCI 0.03% ) is the largest pure-play cell tower REIT in the U.S. The odds are high that your mobile service is made possible by Crown Castle's infrastructure, which is leased out to major service providers like T-Mobile and Verizon Communications.

Average monthly mobile data consumption per user in North America is set to more than quadruple from 11.8 gigabytes (GB) in 2020 to 49 GB by 2026. Thus, demand for Crown Castle's infrastructure should continue to grow.

This explains why Crown Castle's long-term annual dividend growth target is 7% to 8%. Paired with the stock's market-beating 3.2% dividend yield, this is an attractive mix of yield and growth.

And thanks to the fact that Crown Castle is lumped in with tech stocks, it's nearly 10% off of its 52-week high. Income investors can buy the stock's shares at a valuation of 25 times its adjusted funds from operations (AFFO) per-share midpoint forecast of $7.36 for 2022. This is a reasonable valuation for a stock of Crown Castle's quality and growth prospects.


2. Medical Properties Trust

The next REIT to contemplate purchasing in April is Medical Properties Trust ( MPW -1.30% ). Medical Properties Trust is one of the largest owners of hospitals in the world, with a $22.3 billion portfolio throughout the U.S. and eight other countries.

Through the first two years of the COVID-19 pandemic, many REITs struggled to maintain their AFFO per share. But Medical Properties Trust managed to increase its AFFO per share at double-digit rates in 2020 and 2021. This is in large part because hospitals rarely close down due to their essential nature within the communities that they serve.

Because Medical Properties Trust estimates that the U.S. hospital real estate market alone is worth $1 trillion, the company should have many years of growth left in its tank. This should fuel mid-single-digit annual dividend increases for the foreseeable future, which is especially enticing considering the stock's market-crushing 5.4% dividend yield.

And with Medical Properties Trust's stock 11% under its 52-week high, investors can snatch up shares at a trailing-12-months price-to-AFFO per- share multiple under 16.

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