Wall Street analysts sometimes see room for improvement in the price targets of certain stocks, which can be an opportunity for investors to quickly pick up shares that have the potential for strong appreciation.
For dividend stocks such as real estate investment trusts (REITs), this is sometimes an opportunity to acquire a REIT while the yield is high as well. Here are four REITs whose recent prices are well below recent analyst price target increases, offering a potential opportunity for strong price appreciation as well as high yield.
UDR Inc. (NYSE:UDR), formerly known as United Dominion Realty Trust, is a Highlands Ranch, Colorado-based residential REIT that owns, leases and manages approximately 59,000 apartment units across 13 states and Washington, D.C.
On March 1, Barclays analyst Anthony Powell maintained his Overweight rating on UDR but raised his price target from $44 to $50, a 13.6% hike. At its most recent price of $41.74, this represents a potential upside of 19.77%.
The quarterly dividend is $0.38 per share. Its annual dividend of $1.52 yields 3.61%.
LTC Properties Inc. (NYSE:LTC) is a Westlake, California-based healthcare REIT that owns and leases senior housing and skilled nursing facilities. LTC Properties’ revenue is derived from triple-net leases, mortgages and mezzanine loans on its 32 operators. As of Dec. 31, LTC Properties had 216 properties across 29 states valued at about $1.5 billion.
On March 1, RBC Capital Markets analyst Michael Carroll maintained his Outperform rating on LTC Properties but raised his price target from $37 to $40, an increase of 8.1%. From a recent price of $34.94, this represents a potential 14.48% increase.
LTC Properties pays a quarterly dividend of $0.19, and its $0.76 annual dividend yields 6.5%.
Lamar Advertising Co. (NASDAQ:LAMR) is a Baton Rouge, Louisiana-based outdoor advertising company that owns and leases 363,000 displays throughout the U.S. and Canada, including digital and print billboards, interstate logos and airport advertising formats.
On March 1, Citigroup analyst Jason Bazinet maintained his Buy rating on Lamar Advertising, while increasing the price target 7.4%, from $108 to $116. At its most recent price of $103.58, this represents a 12% potential increase.
Lamar Advertising pays a quarterly dividend of $1.25 per share, and its annual dividend of $5 per share has a present yield of 4.76%.
AvalonBay Communities Inc. (NYSE:AVB) is a residential REIT that acquires, develops and manages multifamily communities. As of Sept. 30, AvalonBay Communities owned directly or indirectly approximately 88,000 apartments in 295 communities across 12 states and Washington, D.C.
On March 1, Barclays analyst Powell raised his price target for AvalonBay Communities from $175 to $186, a 6.2% increase, while maintaining an Equal Weight rating for the stock. On the same day, Adam Kramer of Morgan Stanley also raised his price target on AvalonBay Communities from $187 to $190. At its most recent price of $173.70, this represents a 9.5% increase to $190.
AvalonBay Communities pays a quarterly dividend of $1.65, and its annual dividend of $6.60 yields 3.79%.
Investors should remember that analysts are only correct about 50% of the time, so it’s prudent to do your due diligence before purchasing any REIT stock and not rely solely on an analyst’s prediction.
Weekly REIT Report: REITs are one of the most misunderstood investment options, making it difficult for investors to spot incredible opportunities until it’s too late. Benzinga’s in-house real estate research team has been working hard to identify the greatest opportunities in today’s market, which you can gain access to for free by signing up for Benzinga’s Weekly REIT Report.
Over the past five years, private market real estate investments have outperformed the publicly traded REIT market by about 50%. Check out Benzinga’s Real Estate Offering Screener to discover the latest passive real estate investments.
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