The expectation that interest rates will continue higher and for longer than previously thought continues to haunt the price of these real estate investment trusts. Other factors undoubtedly contribute to this issue depending on the individual REIT but that’s the definitely the candidate for “most likely negative factor.”
3 of these are in healthcare-related names, indicating a problem specific to that group of REITs – it may be that investors are selling based on the perception that “rate hikes for longer” affects these more than other types. Whatever the case, it’s clear from the price charts that down trends are in place.
REITs Making New Lows.
Physicians Realty Trust says it concentrates on “stabilized medical office, physician group practice clinics, outpatient care, ambulatory surgery centers, specialized hospitals, rehabilitation facilities, and small specialized long-term acute care hospitals.” Market capitalization is $3.11 billion.
This year’s earnings for the Milwaukee, Wisconsin-based REIT are up by 18% and up over the past 5 years by 14.80%. It trades with a price-earnings ratio of 30 and at 1.07 times its book value. Physicians Realty Trust pays a dividend of 7.20%. Here’s the daily price chart:
The May and June support level in the $13.20 area has been taken out with the selling in September.
Healthcare Realty Trust has a market capitalization of $6.22 billion and trades at a 15% discount to its book value. The Nashville, Tennessee based firm focuses on multi-tenant, on-campus medical office buildings. Earnings over the past 5 years are down by 15% and this year’s are off by 65%.
The stock is actively traded on the NYSE with an average daily volume of 2.45 million shares. Healthcare Realty offers investors a 7.68% dividend.
Medical Properties Trust owns hospitals in 31 U. S. states, seven European countries, Australia and South America. From corporate headquarters in Birmingham, Alabama, the company says their total portfolio amounts to $19.2 billion with 444 properties and 44,000 licensed beds. Market capitalization comes to $3.73 billion.
The NYSE-listed REIT trades average daily volume of 11.5 million shares. In August, Bank of America
BAC
The company pays a dividend of 9.91%.
The daily price chart looks like this:
The lower September price is accompanied by a slightly rising relative strength indicator which may indicate the beginnings of selling exhaustion.
NexPoint Residential Trust is a small cap REIT with a market capitalization of $904 million. The Dallas, Texas-based company is a Russell 2000 component and trades relatively lightly on the New York Stock Exchange with an average daily volume of just 122,000 shares.
According to the NexPoint website, this REIT targets “undercapitalized or mismanaged multifamily real property where we can invest capital and asset management resources to deliver same store NOI growth that is historically atypical of publicly-traded multifamily REITs.” NexPoint pays a 4.84% dividend.
The daily chart is here:
Note that the price is trading well below both the 50-day and 200-day moving average. The relative strength indicator (RSI) is showing a positive divergence between the August low and the September low.
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