Zacks Investment Ideas feature highlights: Mid-America Apartment Communities, Chesapeake Lodging Trust and Highwoods Properties

Zacks Investment Ideas feature highlights: Mid-America Apartment Communities,
              Chesapeake Lodging Trust and Highwoods Properties

PR Newswire

CHICAGO, June 26, 2013

CHICAGO, June 26, 2013 /PRNewswire/ --Today, Zacks Investment Ideas feature
highlights Features: Mid-America Apartment Communities (NYSE:MAA-Free Report),
Chesapeake Lodging Trust (NYSE:CHSP-Free Report) and Highwoods Properties
(NYSE:HIW-Free Report).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

3 Oversold REITs

Since May 22 - the first day Federal Reserve Chairman Ben Bernanke hinted at
"tapering" quantitative easing - the S&P 500 has fallen nearly 7% while the
yield of the 10-year Treasury note has risen from 1.89% to 2.55%.

Some of the hardest hit stocks during this selloff have been those with strong
yields as higher interest rates have made their dividends comparatively less
attractive.

But is this selloff in dividend stocks overdone?

The Fed Giveth, the Fed Taketh Away

A common misperception is that over the last couple of years, yield-starved
investors bid up all dividend stocks to untenable valuations and that this
recent selloff is just a normal correction for these overbought securities.

That may be the case for some dividend stocks - but not all.

In fact, one of the hardest hit groups has been real estate investment trusts
(REITs). But there are many REITs with strong fundamentals there were trading
at very reasonable prices before the recent "dividend off" trade.

And after this recent selloff, these stocks look even more appealing for the
long-term investor. In fact, from a valuation standpoint many of these stocks
are now trading at discounts to their historical averages, which encompasses
eras of much higher interest rates.

3 Oversold REITs

Below are three REITs with strong fundamentals trading at very reasonable
prices. While they might be out-of-favor right now, this dip could prove to be
a good buying opportunity for the long-term investor:

Mid-America Apartment Communities (NYSE:MAA-Free Report)

Price Change since May 22: -15.8%

Current Price / Forward Funds from Operation (FFO): 12.4x

Historical Price / Forward FFO: 13.8x

Dividend Yield: 4.4%

MAA is an apartment REIT focused on the Sunbelt region of the United States.
It has over 49,000 apartment homes. MAA, like many apartment operators, has
been seeing strong increases in rental rates along with multi-year high
occupancy rates. Rising interest rates shouldn't change this trend. Despite
solid industry tailwinds, shares are currently trading at a discount to their
10-year historical forward FFO multiple.

Chesapeake Lodging Trust (NYSE:CHSP-Free Report)

Price Change since May 22: -14.7%

Current Price / Forward Funds from Operation (FFO): 11.0x

Historical Price / Forward FFO: 11.6x

Dividend Yield: 4.7%

Chesapeake Lodging Trust is a REIT primarily focused on upper-upscale hotels
in major business and convention markets and premium select-service hotels in
urban settings or unique locations in the United States. It currently owns 18
hotels with a total of more than 5,400 rooms in eight states and the District
of Columbia. Management believes current industry dynamics will allow the
company to acquire hotels at prices below replacement costs with attractive
yields and upside potential. The stock yields close to 5% itself and trades
below its historical median forward multiple.

Highwoods Properties (NYSE:HIW-Free Report)

Price Change since May 22: -16.1%

Current Price / Forward Funds from Operation (FFO): 11.8x

Historical Price / Forward FFO: 12.3x

Dividend Yield: 5.1%

Highwoods Properties is a REIT that focuses primarily on offices, although it
does own some industrial and retail properties. The company owns or has an
interest in 334 properties encompassing approximately 35.0 million square
feet, along with approximately 649 acres of development land. Its properties
are primarily located in the southeastern United States. Highwoods has taken
it on the chin the last few weeks like many other REITs, but investors who get
in now will pay less than 12x forward FFO and receive a stellar 5.1% yield.

The Bottom Line

Talks of the Fed tapering QE have sent many dividend stocks plunging,
especially real estate investment trusts. But these three high-yielding REITs
all have strong fundamentals and are currently trading at very reasonable
prices. This could present a great buying opportunity for the long-term
investor.

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