Manufactured homes are gaining popularity throughout the US because of the cost advantage that they offer. The manufactured home segment is often regarded as the future of affordable homes. It is a relatively low capex and has high scalability. Another critical trend post the outbreak of the pandemic is the demand for outdoor travel and RV trips. Equity Lifestyle Properties is a REIT that offers you the opportunity to leverage both these trends. If you are an investor looking for REIT stocks to invest in in 2021, then Equity Lifestyle Properties could be a stock you may want to consider. The REIT earns almost half its revenue from managing and operating manufactured home communities and about 48% revenue from managing RV resorts and campgrounds.
Financial Performance of Equity Lifestyle Properties
An important metric for a REIT is the funds from operations. Equity Lifestyle Properties has grown its FFO from $261 million in 2015 to $406 million in 2020. Its normalized funds from operations, which removes non-operating income and expenses, have grown from $279 million in 2015 to $418 million in 2020. Dividend payouts are also an important metric for a REIT. Investors mainly invest in a REIT for its distributions. Equity Lifestyle is currently trading at a 2.05% dividend yield which is close to its 5-year historical average. Interestingly, Equity Lifestyle Properties has grown its dividends at a CAGR of 23% from 2006 to 2020. A dividend CAGR of over 20% over more than one decade is undoubtedly impressive. Dividends have increased every single year throughout this time period. Equity Lifestyle Properties is among the top REIT residential stocks.
Equity Lifestyle Properties was trading around $70 on 28th May 2021. The stock was up 2.5% over the preceding 30 days. Year-to-date, it is up more than 17%. The real estate sector has been on an uptrend lately as inflation, low-interest rates, and a relatively more robust economy are aiding the industry.