Despite coming in lower than estimates in July, inflation remains at discomforting levels for the policymakers. As supply-chain disruptions and high energy prices are expected to keep inflation elevated, the Federal Reserve has reiterated its tough stance against inflation. The central bank signaled to raise interest rates aggressively until inflation reached the 2% goal.
This is expected to keep the stock market under pressure in the near term. However, Real Estate Investment Trusts (REITs) are gaining significant attention amid the uncertainties surrounding the economy because they typically benefit from an inflationary environment, with the values of properties owned by them rising.
Also, REITs help generate a steady income stream as they must pay at least 90% of their income as dividends.
Given this backdrop, investors could consider investing in fundamentally strong diversified REITs Crown Castle Inc. (CCI) and Lamar Advertising Company (LAMR) before they soar.
Crown Castle Inc. (CCI)
CCI owns, operates, and leases more than 40,000 cell towers and approximately 80,000 route miles of fiber supporting small cells and fiber solutions across the U.S. market. Its business provides access, including space or capacity, to its shared communications infrastructure via long-term contracts in various forms, including lease, license, sublease, and service agreements.
On July 9, 2022, the company increased its revolving credit facility commitments to $7 billion and extended the maturity of the existing facilities to July 2027. With such significant liquidity, the company is well positioned to pursue investment opportunities consistent with its growth strategy and should be able to deliver attractive risk-adjusted returns.
CCI’s income from continuing operations grew 26.4% from the year-ago value to $421 million for the second quarter that ended June 30, 2022. The company’s adjusted EBITDA increased 12.5% year-over-year to $1.07 billion. Also, its adjusted FFO per share came in at $1.80, representing an increase of 5.3% year-over-year.
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Analysts expect CCI’s FFO and revenue for the quarter ending September 30, 2022, to increase 10.9% and 7.1% year-over-year to $1.92 and $1.73 billion, respectively. It surpassed consensus FFO estimates in each of the trailing four quarters. Over the past six months, the REIT has gained 2.1% to close the last trading session at $170.17.
CCI’s POWR Ratings reflect solid prospects. According to our proprietary rating system, it has an overall rating of…
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