Home Properties, with a market value of $2.8 billion, specializes in garden-style apartments in suburban locations throughout the space-constrained Northeast and mid-Atlantic suburban markets.
Its shares have a total return of 2% this year and a three-year average annual return of 38%. S&P has them rated "strong buy," with a $72 price target, which is a 23% premium to the current price.
S&P says this company is its favorite in the apartment subsector due in part to the company's acquisition strategy of buying older properties to upgrade. It made eight acquisitions for $501 million last year, "all of which are expected to add positively to 2012 earnings. We expect average rent hikes of about 4% this year."
Essex Properties, with a market value of $4.8 billion, manages apartment buildings on the West Coast. It has an interest in about 134 apartment properties.
Its shares are down 0.16% % this year but have a three-year average annual return of 44%. S&P has its shares rated "strong buy" with a $172 price target, which is a 23% premium to the current price.
S&P expects the company will see 96% occupancy rates this year, virtually full occupancy, due to the improving employment picture. So it will be able to raise its rents by 6% and that will contribute to estimated earnings of $1.88 this year, which will grow by 24% next year.
UDR, with a market value of $5.5 billion, is the owner of multi-family residential properties with more than 40,000 apartments, many in major cities on the East Coast, including New York, Boston and Washington, D.C.
Its shares are up 1.4% this year and have a three-year average annual return of 56%. S&P analysts give them a "buy" rating and a $30 price target, a 10% premium. The ratings firm expects to see 13% revenue growth this year, aided by acquisitions and rent increases of 5% to 6%.
Simon Property Group
(SPG - Get Report)
Simon Property, with a market value of $41 billion, is the largest retail REIT in the U.S., operating about 393 properties, including regional malls, premium outlet centers, and international properties.
Its shares are up 7.2% this year and have a three-year average annual return of 70%. Analysts give them eight "buy" ratings, seven "buy/holds," six "holds," and one "weak hold," per S&P. S&P says the company should benefit from low new construction trends, established relationships with many of the biggest retailers, excellent regional mall locations and an improving economy.
Simon Property Group said last week that it is in agreement to jointly develop a premium retail outlet center in Shanghai, China, adjacent to the Shanghai Disney Resort. Its partner is Bailian Group, the largest retail conglomerate in China. Simon Property has investments in 70 Premium Outlet Centers worldwide.
(PSA - Get Report)
Public Storage, with a market value of $23 billion, is the largest player in the competitive self-storage sector.
Its shares are down 0.8 % this year but have a three-year average annual return of 41%. S&P has it rated "buy" with a $153 price target, a 16% premium.
The ratings firm said PSA's revenue grew 6.4% last year, and should rise by 8.2% this year, aided by its increasing occupancy rates and rents, and its 11 acquisitions last year and six so far this year. It's expected to generate funds from operations of $6.40 per share this year, growing to $6.85 next year.