Apartment Investment and ManagementNYSE: AIV

Apartment Investment and Management Company has and continues to grow a premier multifamily rental property portfolio in growing markets throughout the U.S. AIV's robust development pipeline will enable the Company to grow revenues and NOI much faster than its peers in the industry. We initiate with a Buy rating and an $11.20 price target.

Apartment REITs have been the fifth-best performing sector this year, outperforming the Dow but lagging behind S&P indexes. Oversupply concerns in the apartment market have been overblown, with strong job growth indicating that demand is outstripping supply. Apartment Investment and Management Company is a small-cap REIT focused on value-add and opportunistic apartment acquisitions, with plans for future development projects in Southeast Florida.

The Brightline inter-city rail route in South Florida has led to increased property prices and rental rates near its stations. Apartment Investment and Management Company (Aimco) has the highest exposure to the Miami market, with over 6,000 units in Miami and Fort Lauderdale. Aimco is a buy due to its focus on markets and demographics where it can create value, with its South Florida development expected to create rising NOI and realized capital appreciation.

Real Estate Investment Trusts (REITs) own, operate, and finance real estate properties such as healthcare facilities, apartment complexes, hotels, and offices. One of the most important factors to consider when assessing REITs is their dividend ratio.