Best Real EstateStocks — Ranked by 5 Models
REITs across residential, commercial, data centers, cell towers, and industrial properties.
Data as of
104 companies
Real Estate Companies (104)
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Start Free →How the five models treat Real Estate
| Profile | Models | Fair value | Q / V / M / T |
|---|---|---|---|
| REIT |
| FFO × Nareit property-group P/FFO | 35% / 15% / 35% / 15% |
| General |
| Two-stage owner-earnings DCF (Damodaran industry cost of equity) | 40% / 10% / 35% / 15% |
A model that does not apply is left out of the company's axis, never scored as zero. Full definitions on the methodology page.
Investing in Real Estate Stocks
If you evaluate a REIT using standard earnings per share, you'll conclude that many of them are barely profitable. That's because depreciation on real estate assets reduces reported net income even when the properties are generating strong cash flow. This is why funds from operations (FFO) exists — and it is what the fair value for a REIT is built on: FFO per share (net income plus depreciation and amortization) times the median price-to-FFO of its Nareit property group.
The quality and value models are applied as their sources wrote them, which leaves some out. Piotroski rates a REIT only when it presents a classified balance sheet; most REITs do not, and for them the F-Score is not applicable rather than computed on something else. Greenblatt does not rate REITs: their real estate is the capital, so return on capital becomes a property yield. Mortgage REITs get no FFO-based fair value, because FFO does not describe them. REITs are legally required to distribute at least 90% of taxable income as dividends, which makes the payout a structural feature rather than a choice.
The sub-industry diversity within real estate is often underappreciated. Data center and cell tower REITs are really technology infrastructure plays with REIT tax structures. Net-lease REITs like Realty Income behave more like bonds with inflation escalators. Industrial REITs ride e-commerce logistics volumes. Residential REITs are tied to housing affordability and migration patterns. Each sub-type responds to different macro drivers, and each is valued against its own Nareit property group.
Watch out for very high yields: the market is often pricing in a distribution cut that the income statement hasn't revealed yet. The models see a cut only once it is in the filings.
Real Estate Stocks — Frequently Asked Questions
How does AlphaStocks value REITs differently from regular stocks?
Fair value for a REIT is FFO per share (net income plus depreciation and amortization) times the median price-to-FFO of its Nareit property group, with the group's interquartile range as low and high. The scoring models run as written, which means Greenblatt does not rate REITs and Piotroski rates only those with a classified balance sheet.
Why do many REITs show Piotroski as not applicable?
Piotroski's liquidity signal compares current ratios, and most REITs present an unclassified balance sheet with no current assets or liabilities. Rather than invent a substitute signal, the model reports the F-Score as not applicable for them.
Which REIT sub-types score highest on AlphaStocks?
It changes with prices and filings; the list above is sorted by today's composite. Each REIT's fair value is measured against its own Nareit property group, so an office REIT is not judged by apartment multiples.