3 Affordable & Diverse Top-Rated REITs To Buy Now

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Volatility in the broader financial sector has affected many Real Estate Investment Trusts (REITs), with stocks selling off mightily over the last few weeks. However, investors may consider looking for opportunities among these equities as REITs can offer lucrative dividends along with valuable exposure to real estate.

Here are 3 Zacks Rank #1 (Strong Buy) REIT stocks that investors may want to consider, as they recently have been seen trading at a discount.

Alexander & Baldwin Holdings (ALEX - Free Report)

First up is Alexander & Baldwin Holdings, which owns, operates, and manages retail, industrial, and office space primarily in Hawaii and on the U.S. mainland. In addition to this, the company also owns grocery/drug-anchored retail centers.

Shares of ALEX have recently traded at around $17 per share and 16.6X forward earnings, which is slightly above the industry average of 10.4X. However, the stock has also recently traded 84% below its decade high of 108.3X and at a 46% discount to the median of 31.1X.

Even better, earnings estimate revisions have gone up over the last 30 days. Fiscal 2023 earnings estimates have gone up by 6%, with FY24 EPS estimates rising 10%. Alexander & Baldwin’s 5.44% dividend yield is slightly above its industry average and rewards investors as the broader financial sector looks to stabilize.

Zacks Investment Research

Image Source: Zacks Investment Research

Arbor Realty Trust (ABR - Free Report)

Another REIT investors may want to consider at the moment is Arbor Realty Trust, a specialized real estate finance company that invests in real estate-related bridge and mezzanine loans, preferred equity, and mortgage-related securities among other real estate assets.

Arbor Realty’s stock has recently been seen trading around $11 per share and 5.7X forward earnings, which is slightly below the industry average of 6.4X. Plus, shares of ABR have recently traded 67% below its decade high of 17.5X and at a 46% discount to the median of 10.6X.

Arbor Realty’s fiscal 2023 EPS estimates have gone up 6% over the last 30 days and are now expected at $1.90 per share. This supports the stock being undervalued from a P/E perspective. Even better, the 14.76% dividend yield at $1.60 per share is slightly above the industry average and should be very rewarding to investors at ABR’s recent levels.

Zacks Investment Research

Image Source: Zacks Investment Research

Invesco Mortgage Capital (IVR - Free Report)

Rounding out the list is Invesco Mortgage Capital, which focuses on financing and managing residential and commercial-backed securities and mortgage loans.

Invesco’s stock has recently traded at around $10 per share, and fiscal 2023 earnings estimate revisions have soared 22% in the last month. Earnings are now expected to be at $3.54 per share in FY23 compared to estimates of $2.89 thirty days ago.

This certainly makes shares of IVR look undervalued, having recently traded at just 2.9X forward earnings and nicely below the industry average of 6.4X. Furthermore, Invesco stock recently traded 96% below its decade-long high of 55X and 63% beneath the median of 8.1X.

On top of that, IVR’s dividend yield is a very appealing 24.81%, well above an already high industry average of 13.62%.

Zacks Investment Research

Image Source: Zacks Investment Research


These three REITs are diverse in their offerings and appear to be undervalued at their recent levels, with the rising earnings estimate revisions supporting this. More upside could certainly be in the cards for these stocks when volatility in the broader financial sector subsidies and their stellar dividend yields give investors another reason to buy.  

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