In this article, we discuss the 5 best real estate stocks to buy now. If you want to read our discussion on the real estate sector, go directly to 12 Best Real Estate Stocks To Buy Now.
5. Equinix, Inc. (NASDAQ:EQIX)
Number of Hedge Fund Holders: 38
Equinix, Inc. (NASDAQ:EQIX) is a Redwood, California-based digital infrastructure corporation that has a specialty in providing data centers to multiple tenants. The facility allows competing networks to share data traffic. Equinix, Inc. (NASDAQ:EQIX) takes ESG concerns very seriously, as 95% of its data centers globally consume 100% clean and renewable energy.
Richard Choe at JPMorgan thinks that Equinix, Inc. (NASDAQ:EQIX) is observing strong demand trends from providers of enterprise and cloud services. The analyst has given Equinix, Inc. (NASDAQ:EQIX) stock an Overweight rating and a target price of $850 in an investor note issued on August 24 following a meeting with the management. Experts think that some of the higher costs being incurred will be combated by the pricing actions of the company, which will result in revenue growth. Meanwhile, better efficiency in operations will result in the growth of funds from operations (FFO). Equinix, Inc. (NASDAQ:EQIX) has an attractive annual payout of $12.40 per share as of September 26. These factors make Equinix, Inc. (NASDAQ:EQIX) one of the best real estate stocks to buy now.
In its Q2 2022 investor letter, Baron Funds shared its stance on Equinix, Inc. (NASDAQ:EQIX). Here’s what the firm said:
“Equinix, Inc. is a network dense global data operator of over 240 data centers in 69 metros and 30 countries. Its customers place high value on the ecosystem of customers that Equinix has curated within its data centers over many years so that they are able to interconnect within the data center facility instead of having data travel through the public internet (latency sensitive applications as well as data security considerations). Customers value the global network with 90% of customers in multiple metropolitan areas and 75% in multiple geographic regions.
Equinix has a diverse but valuable customer base with no single customer greater than 2.6% of recurring monthly revenues. COVID-19 has accelerated digital transformation priorities for many organizations, and we believe that Equinix will be poised to benefit from: i) organic growth through new bookings and pricing power (the majority of incremental bookings are from existing customers); ii) growth of high margin cross-connect revenue (approximately 20% of total); and iii) continued geographic expansion through development and select M&A. We believe the combination of these factors will allow the company to grow annual cash flow in the high singledigit range.”
