4 REITs That Could Help Protect Your Portfolio Right Now

Despite the global pandemic creating chaos, the U.S real estate market has shown resilience. Buyers were willing to take advantage of low mortgage rates, and with housing inventory remaining tight, the REIT market outperformed last year. Moreover, the sector’s growth is supported by price increases for rents and higher real-estate values amid the hot inflation.

The Federal Reserve raised interest rates by 0.75%, matching the magnitude of its previous move. In this situation, Morgan Stanley’s (MS) U.S. equity strategist and chief investment officer Mike Wilson believes in defensive plays such as REITs.

REITs are known to perform well during periods of rising long-term interest rates and have historically outperformed in periods of above-average inflation.

Given this backdrop, fundamentally strong REITs New Residential Investment Corp. (NRZ), City Office REIT, Inc. (CIO), Alliance Global Group, Inc. (ALGGY), and TPG RE Finance Trust, Inc. (TRTX) might be solid buys now to hedge against the market turbulence.

New Residential Investment Corp. (NRZ)

NRZ operates as a real estate investment trust (REIT) in the United States. It operates through its Origination; Servicing; MSR Related Investments; Residential Securities; Properties and Loans; Consumer Loans; Mortgage Loans; and corporate segments.

In June, NRZ announced that it had entered into agreements to internalize the company’s management function. The company plans to change its name and rebrand as Rithm Capital Corp. (RITM).

Michael Nierenberg, Chairman, Chief Executive Officer, and President of NRZ, said, “We view this transaction as a way to drive value for shareholders with expected cost savings, incremental synergies and ability to leverage employees across the NRZ ecosystem.”


NRZ’s revenues increased 57.6% year-over-year to $1.73 billion in the first quarter ended March 31. Its net income attributable to common stockholders improved 312.5% year-over-year to $661.86 million. The company’s net income per share of common stock increased 315.2% from its year-ago value to $1.37.

The consensus revenue estimate of $1.12 billion for the fiscal quarter ended June indicates a 146.4% improvement year-over-year. The consensus EPS is expected to be $0.31 for the same period, indicating a 0.6% year-over-year rise. Additionally, NRZ has topped consensus EPS estimates in three of the trailing four quarters, which is impressive.

The stock has gained 12.5% over the past year and 6.9% over the past month to close its last trading session at $10.62.

NRZ’s POWR Ratings reflect this promising outlook. The company has an overall rating of B, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

NRZ is rated a B in Value and Quality. Within the REITs – Mortgage industry, it is ranked #3 out of 30 stocks. To see additional POWR Ratings for Growth, Momentum, Stability, and Sentiment for NRZ, click here.

City Office REIT, Inc. (CIO)

CIO is an internally managed real estate company that acquires, owns, and operates high-quality office properties located primarily in metropolitan areas in the Southern and Western United States.

On June 16, CIO announced a quarterly dividend amount of $0.20 per share of common stock and common unit of partnership interest for the second quarter of 2022. Additionally, a regular quarterly dividend of $0.4140625 per share of the company’s 6.625% Series A Cumulative Redeemable Preferred Stock was declared. Both dividends were payable on July 22 and reflect the company’s shareholder return ability.

In the same month, CIO announced that it had completed the sale of its Lake Vista Pointe property in Dallas, Texas, for a gross sale price of $43.80 million. The company intended to use the net proceeds from the sale to repay…

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