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Mizuho’s August REIT Favorites: Cousins Properties and Phillips Edison Offer Yield Plus Upside
Real estate investment trusts have quietly outperformed the broader U.S. stock market this year, and Mizuho analysts believe two names in particular still have room to run. Cousins Properties and Phillips Edison & Company top the firm’s real estate picks for August. Both deliver solid dividend yields—4.34% for Cousins and 3.24% for Phillips Edison—while trading at levels that leave additional upside according to the bank’s price targets.
The FTSE Nareit All Equity REITs Index rose 17.7% through the end of July, well ahead of the 10.5% gain recorded by the Dow Jones U.S. Total Stock Market Index. That relative strength reflects improving fundamentals in several property sectors, lower interest-rate volatility compared with recent years, and investor demand for income-producing assets.
Mizuho divides its coverage into two broad groups: Healthcare/Industrial/Office and Retail/Housing/Triple Net. Its two August favorites sit in different categories yet share common strengths: recent earnings beats, raised guidance, and identifiable near-term catalysts.
Cousins Properties is a pure-play Sunbelt office REIT that owns and manages roughly 20 million square feet across Atlanta, Austin, Charlotte, Dallas, Nashville, Tampa, and Phoenix. The company reported second-quarter funds from operations of 75 cents per share, one cent above consensus, and revenue of $268.5 million that also topped estimates. Management raised the lower end of its full-year FFO outlook. Shares have advanced about 16% year to date, yet Mizuho analyst Vikram Malhotra still sees further gains. His $33 price target implies roughly 12% upside from recent levels.
Malhotra points to three main catalysts. First, office demand in key Sunbelt markets appears to be stabilizing. Absorption is improving in Austin and Atlanta, leasing momentum is building, and new supply risk is declining. Second, execution risk looks lower after a strong second quarter that included approximately one million square feet of leasing activity and cash rent spreads of plus 12% in the first half of 2026. Third, the balance sheet gives management flexibility to pursue selective external growth through non-core asset sales and opportunistic acquisitions. For investors seeking exposure to office properties without heavy concentration in challenged coastal gateway markets, Cousins offers a more constructive setup.
Phillips Edison & Company takes a different approach. Its portfolio of 330 shopping centers is heavily weighted toward grocery-anchored centers, a segment that has proven more resilient than general retail. The REIT posted core FFO of 69 cents per share in the second quarter, one cent ahead of expectations, and revenue of $189.6 million that exceeded forecasts. Full-year core FFO guidance was raised. Analyst Haendel St. Juste expects above-average FFO growth in 2026 and 2027 and believes the stock can outperform its shopping-center peers. His $43 target suggests about 7% upside. Shares are already up nearly 14% this year.
St. Juste highlights several supportive factors. Occupancy stands at a sector-leading 97.5%, and exposure to troubled “watchlist” tenants is limited. In a low-supply environment, continued leasing demand should support rent growth. Any isolated tenant bankruptcies could actually create opportunities to re-lease space at higher rates. Capital deployment into acquisitions or developments is expected to contribute additional earnings growth. Grocery-anchored retail benefits from relatively steady consumer traffic for everyday needs, giving Phillips Edison a defensive quality that many pure discretionary retail landlords lack.
Both stocks illustrate why certain REITs have regained investor attention. Office properties in growing Sunbelt cities are showing early signs of recovery after a difficult period, while necessity-based retail continues to demonstrate resilience. Attractive yields provide a cushion if share-price appreciation slows, and the recent pattern of earnings beats plus guidance raises suggests management teams are navigating the current environment effectively.
Investors considering these names should still weigh the usual real-estate risks: sensitivity to interest rates, potential shifts in occupancy or rent growth, and broader economic conditions that affect tenant health. Office exposure, even in favored markets, carries more uncertainty than industrial or residential assets. Retail, while steadier when grocery-anchored, is not immune to changes in consumer spending. Position sizing and diversification across property types remain important.
For those seeking income combined with moderate capital-appreciation potential in the REIT space, Mizuho’s two August picks offer a focused way to participate in the sector’s ongoing recovery. Cousins provides leveraged exposure to Sunbelt office stabilization, while Phillips Edison delivers higher occupancy and more defensive retail cash flows. Together they reflect the selective opportunities that exist when fundamentals begin to improve and valuations have not yet fully caught up.
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