Wall Street analysts occasionally see room for improvement in price targets for certain stocks, which can be an opportunity for investors to quickly pick up stocks that have the potential for strong appreciation.
For dividend stocks like real estate investment trusts (REITs), this is sometimes an opportunity to acquire a REIT while the yield is even higher. Here are four REITs whose current prices are well below recent analyst price target increases, offering strong value appreciation as well as the potential opportunity for higher yields.
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 in 13 states and Washington, D.C. does management.
On March 1, Barclays analyst Anthony Powell maintained his Overweight rating on UDR, but raised his price target from $44 to $50, an increase of 13.6%. 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 comes from triple-net leases, mortgages and mezzanine loans at its 32 operators. As of December 31, LTC Properties owned 216 properties in 29 states valued at approximately $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 8.1% increase. From the recent price of $34.94, this represents a potential upside of 14.48%.
LTC Properties offers a quarterly dividend of $0.19, and its $0.76 annual dividend yields 6.5%.
Lamar Advertising Company (NASDAQ: LAMR) is a Baton Rouge, Louisiana-based outdoor advertising company that owns and leases 363,000 displays across the United States 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 raising the price target by 7.4% from $108 to $116. At its most recent price of $103.58, this represents a potential upside of 12%.
Lamar Advertising pays a quarterly dividend of $1.25 per share, and its annual dividend of $5 per share has a current yield of 4.76%.
avalonbay communities inc. (NYSE: AVB) is a residential REIT that acquires, develops, and manages multifamily communities. As of September 30, Avalonbay Communities owns approximately 88,000 apartments directly or indirectly in 295 communities in 12 states and Washington, DC.
On March 1, Barclays analyst Powell raised his price target for AvalonBay Communities from $175 to $186, an increase of 6.2%, while maintaining an equal weight rating for the stock. That 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, it is up 9.5% to $190.
AvalonBay Community pays a quarterly dividend of $1.65, and its annual dividend of $6.60 yields 3.79%.
Investors should remember that analysts are correct only about 50% of the time, so it is prudent to do due diligence before purchasing any REIT stock and not to rely solely on one analyst’s prediction.
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