REIT stocks in general recently did well thanks to the recent decision of the Fed to not raise interest rates. Due to the anticipation of the Federal Open Market Committee (FOMC) meeting on Thursday, the market saw an increase with a further spike after the final decision itself was released to the general public. To be more specific, the MSCI US REIT Index (NYSE:^RMZ) went up by 3 percent, while the Vanguard REIT ETF (NYSEArca:VNQ) went up by 3.1 percent.
Mostly due to the lack of inflation, the Fed has made the decision to keep federal fund rates between 0 and 0.25 percent. They also have made mention that the target U.S. inflation was around 2 percent, but the current rates are actually far from that. If you want to learn more details, you can read our post on the website ValueWalk (click here).
For the most part, all REIT stocks have generally performed rather positively, with the exception of lodging. This specific sector fell after the Fed’s announcement. However, healthcare was seen as the big performance leader out of all of the sectors this week. With no rise in interest rates, it seems the market has favored companies with long leases (healthcare) rather than companies with short leases (lodging).
In regards to other events taking place this week, shares of Trade Street common stock were de-listed following the announcement of the Independence Reality Trust (NYSE:IRT) – Trade Street Residential merger, so we have made the decision to exclude Trade Street from our REIT list. Furthermore, STORE Capital (NYSE:STOR) also saw an increased dividend rate of approximately 8 percent, taking the total to $0.27.
Disclaimer: This is not a recommendation to buy or sell stocks. The highest-yield stocks are not necessarily the best portfolio investment choice. The purpose of this report — which is essentially a snapshot of information available on September 18, 2015 — is to reduce your stock analysis by enabling you to compare stock and sector performance. Please do your own due diligence before making any investment decision.
As of August 31, 2015, the equity REITs are constituent companies of the FTSE NAREIT All REITs Index. Companies whose equity market capitalization is lower than $100 million have been disregarded.
This report is not engaged in rendering tax, accounting, or other professional advice through this publication. No statement in this issue is to be construed as a recommendation to buy or sell any security or other investment. Some information presented in this publication has been obtained from third-party sources considered to be reliable. Sources are not required to make representations as to the accuracy of the information, however, and consequently the publisher cannot guarantee accuracy.
Disclosure: The author has no positions in any shares mentioned, and no plans to initiate any positions within the next 72 hours.