2 REITs Making New Highs Despite Rate Hike Concerns

The continued strength of Global Net Lease Inc. GNL and Getty Realty Corp. GTY is awesome to behold, especially given the uncertainty about the pace of Federal Reserve interest rate hikes. Buyers of these rate-sensitive real estate investment trusts (REITs) clearly expect Wednesday’s announcement to hit the lower end of expectations.

Global Net Lease is on the smaller side of publicly traded real estate investment trusts with a market capitalization of $1.52 billion. It’s relatively lightly traded for a New York Stock Exchange-listed security with an average daily volume of 658,000 shares. 

A big attraction of Global Net Lease is the higher-than-average dividend yield, now sitting at 10.96%. Less attractive may be the 2022 funds from operations (FFO), which come in at negative 121.505. The FFO record for the past five years is negative 17.6%. The company has more long-term debt than shareholder equity and trades at 1.03 times book value.

Here is the daily price chart:

Getty Realty is a spin-off of Getty Oil and operates as a net lease REIT with a portfolio of “convenience and automotive retail real estate,” according to its website. The company has 1,021 properties in 38 states and Washington, D.C. 

The REIT trades with a price-earnings ratio of 21 and at 2.24 times book. The 2022 funds from operations came in at negative 15.3%, and the past five-year record is 3.3%. The average daily volume is light at 349,000 shares. The market capitalization for Getty Realty is $1.68 billion. It pays a dividend of 4.77%. 

The daily price chart is here:

Real estate investment trusts have generally had a good January, which may be a good sign for the rest of the year. That these two REITs keep climbing to new highs as the weeks go on is remarkable, considering that the major stock indexes are unable to do so — at least so far.

Not investment advice. For educational purposes only.

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