EPRT - 13 Fast-Growing REITs With Strong Balance Sheets

2024-05-04 09:00:00 ET

Summary

• There are two types of REITs: COWs (Cash Only Wanted) that focus on high dividend yield, and FROGs (Fast Rate of Growth) that prioritize maximizing total return.
• Higher yield usually means lower gain, and vice versa, so investors generally have to choose between the two.
• This article lists 13 REITS that have grown Funds From Operations at double-digit rates, maintain ample liquidity, and have outperformed the average REIT over the past 3 years.
• The outlook for FROG investing is then addressed.

There are two kinds of real estate investment trusts, or REITs, that investors are constantly seeking. One is COWs (Cash Only Wanted), where the object of the game is to milk the company for its safe, above-average dividend yield. The other is FROGs (Fast Rate of Growth), where the object of the game is to maximize total return by maximizing share price gain.

Historically, since the invention of REITs about 60 years ago, the average Yield on a REIT is about 4%, (give or take a fraction of a point), and the average total return is about 11%, so the average share price Gain is about 7%....

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