The S&P 500 (SP500) is up 9.8% since the end of October. However, many real estate investment trusts (REITs) are outperforming those returns.
Take Rexford Industrial Realty, Inc. (NYSE:REXR) – up a whopping 21.2% since Halloween.
Rexford is trading well below its historical averages, with a dividend yield (2.90%) more than double the S&P 500’s yield (1.41%). Additionally, it has 15-20% annual adjusted funds from operations (AFFO) growth prospects.
This indicates major potential for success, making it not too late to consider buying more shares even after its recent rally.
Rexford retains a “Strong Buy” rating, reaffirming its position as a standout pick in the REIT space.
Stick With Quality
Sometimes investors overcomplicate things.
The simplest way to make money in the stock market is to buy blue chip stocks when they’re trading with an attractive margin of safety.
In this situation, investors set themselves up to benefit from the reliable fundamental growth that these companies generate, as well as capital appreciation created by multiple expansion.
When it comes to quality, it doesn’t get any better than Rexford Industrial.
Rexford scores 99/100 on the iREIT® IQ quality rating system, ranking it among the top 4 REITs in coverage.
Even with no perfect 100/100 ratings currently and only 3 REITs with 99/100 IQ ratings, Rexford stands in great company.
Therefore, when thinking about “sleep well at night” (SWAN) REITs, Rexford is a top consideration.
Without delving into an in-depth overview of Rexford’s operations here, it’s suffice to say that this industrial REIT owns warehouse properties, all located in southern California markets.
Rexford has successfully built a portfolio of industrial buildings around the Port of Los Angeles, capitalizing on the influx of goods from Asian markets and the bustling trade activity in the region.
The company has benefitted from strong demand for space in the southern California infill market, boasting lower vacancy rates, lower supply risk, and higher same-store NOI growth compared to other major U.S. markets.
Despite the concentrated nature of its portfolio, Rexford stands out with its ability to produce results that outperform its peers. The company has demonstrated that it can thrive notwithstanding potential long-term shifts in global manufacturing hubs.
For Rexford, the substantial advantages of its geographically concentrated portfolio outweigh the downsides of diversification.
Valuation Breakdown: Rexford Has Plenty Of Room Left To Run
In a recent article, highlighted the record-breaking Thanksgiving/Black Friday and the role of several logistics companies and industrial REITs, including Rexford, in managing the surge in e-commerce activity.
Despite the significant rally in its shares, Rexford still appears attractively valued, indicating potential upside of another 15-20%.
At its current price of $52.42 per share, Rexford continues to show promise for further growth.