5 Best Real Estate Stocks to Buy Now

In this article, we discuss the 5 best real estate stocks to buy now. If you want to see more stocks in this selection, go to the 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 California-based digital infrastructure company that was founded in 1998. It is a leading data center REIT globally.

On October 12, Matthew Niknam at Deutsche Bank gave Equinix, Inc. (NASDAQ:EQIX) stock a target price of $635, along with a Buy rating. The analyst noted that the data center stocks are weighed down by increasing power costs and recession-related fears. However, experts believe that the top-line trends of Equinix, Inc. (NASDAQ:EQIX) are strong due to its superior brand power along with premium positioning in the industry. Equinix, Inc. (NASDAQ:EQIX) has a multi-region presence and the conversion towards a REIT has provided the corporation with a sustainable, tax-efficient structure for the long run. The stock’s forward annual dividend yield stands at 2.18% as of October 28.

Baron Funds shared its outlook on Equinix, Inc. (NASDAQ:EQIX) in its Q2 2022 investor letter. 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.”