Summary
- AvalonBay has a portfolio of properties located in 6 key coastal markets in the U.S.
- The REIT should be able to continue to benefit from strong market fundamentals in its key markets.
- AvalonBay pays a growing 2.9%-yielding dividend but its shares are currently fairly valued.
Investment Thesis
AvalonBay Communities (AVB) delivered solid Q1 2019 results as the company saw mid single-digit growth in its net operating income and funds from operations. The REIT should continue to benefit from favorable demographic trends, and strong market fundamentals in its 6 major coastal markets. AvalonBay’s management team also has a strong track record of delivering NOI margin improvement in the past. The REIT is a fine choice for investors seeking a stable and steadily growing dividend income as it has a good track record of dividend growth. However, its shares are currently fairly valued. Therefore, we recommend investors to wait on the sideline.
Data by YCharts
