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10 Best REIT Stocks Under $10

In this article, we discuss 10 best REIT stocks under $10. You can skip our detailed analysis of the REIT sector and its outlook, and go directly to read 5 Best REIT Stocks Under $10

A Real Estate Investment Trust (REIT) is a company that owns, operates, or finances income-generating real estate properties. REITs are required to distribute at least 90% of their taxable income to shareholders annually in the form of dividends, which makes them an attractive investment option for income-seeking investors. They provide a way for investors to invest in real estate without actually owning physical properties and offer diversification benefits to a portfolio. This has resulted in the growing popularity of REIT stocks among American investors. According to a report by Nareit, approximately 150 million Americans, or roughly 45% of American households have invested in REIT stocks directly or indirectly through mutual funds or exchange-traded funds.

In 2022, high-interest rates and growing inflation affected the REIT sector as these economic conditions can also increase the borrowing costs of properties. This results in low profits and falling dividend payments for REIT companies. Last year’s returns also conform to this phenomenon as elevated interest rates caused the REIT sector to decline. The MSCI US REIT Index, which tracks the performance of publicly traded REITs, fell about  26% in 2022 through October 31, compared with a 16.5% decline in the S&P 500 in this period.

Despite a challenging period in 2022, analysts are giving a positive outlook for the REITs this year. Edward Pierzak, a senior Vice President of Research at Nareit, spoke with Wealth Management Real Estate about the sector’s position in 2023 so far. He said that though the economic conditions are challenging for the sector, the operational performance of the companies is seemingly more stable. Pierzak gave an insight into the sector’s balance sheet this year. He revealed that year-over-year FFO is up over 10% and net operating income is up 6.8%. Moreover, occupancy rates have also shown a 9.36% growth from the same period last year. This shows that the REIT sector is likely to perform well in 2023.

Historical analysis of REIT stocks also shows that they have outperformed other asset classes over the years. In our article titled 11 Best REIT Dividend Stocks, we reported that REITs outperformed diversified core funds by 470 basis points annually over the past 30 years. The report also mentioned that the REIT sector delivered a 10.6% annual average return in the past 15 years, compared with a 6.5% return of the core funds during this period.

As dividends are an essential component of the REIT sector, investors consider quality REIT companies with strong dividend policies. Some of the best dividend stocks from the REIT sector include American Tower Corporation (NYSE:AMT), Prologis, Inc. (NYSE:PLD), and Crown Castle Inc. (NYSE:CCI). However, we will discuss the best REIT stocks under $10 in this article.

Photo by Owen Lystrup on Unsplash

Our Methodology:

For this list, we selected dividend stocks from the REIT sector that have share prices below $10, as of April 19. Next, we sorted these stocks based on the number of hedge funds that own shares in these companies as of the fourth quarter of 2022.

10 Best REIT Stocks Under $10

10. Generation Income Properties, Inc. (NASDAQ:GIPR)

Number of Hedge Fund Holders: 1

Share Price as of April 19: $4.40

Generation Income Properties, Inc. (NASDAQ:GIPR) is a Florida-based real estate investment trust company that specializes in the acquisition of diversified portfolios of high-quality single-tenant properties. In the fourth quarter of 2022, the company reported revenue of $1.4 million, which showed a 49% growth from the same period last year. At the end of December 0f 2022, the company had over $3.8 million available in cash and cash equivalents. It ended the year with total assets worth over $64.2 million.

On March 9, Generation Income Properties, Inc. (NASDAQ:GIPR) declared a monthly dividend of $0.039 per share, which was in line with its previous dividend. The stock has a dividend yield of 10.64%, as of April 19. American Tower Corporation (NYSE:AMT), Prologis, Inc. (NYSE:PLD), and Crown Castle Inc. (NYSE:CCI) are some of the best dividend stocks from the REIT sector to consider.

At the end of Q4 2022, only one hedge fund owned stakes in Generation Income Properties, Inc. (NASDAQ:GIPR), with a value of $89,000.

9. Global Self Storage, Inc. (NASDAQ:SELF)

Number of Hedge Fund Holders: 4

Share Price as of April 19: $5.12

Global Self Storage, Inc. (NASDAQ:SELF) is an American self-managed REIT that owns and operates self-storage properties. Since the start of 2023, the stock has delivered a 3.23% return to shareholders, as of the close of April 19. The stock is currently trading at $5.12 per share.

In the fourth quarter of 2022, Global Self Storage, Inc. (NASDAQ:SELF) reported revenue of $3.1 million, which was up 10.7% from the prior-year period. At the end of December 2022, the company had $6.5 million available in cash and cash equivalents. Its operating income also grew by 5.7% year-over-year to $0.8 million.

Global Self Storage, Inc. (NASDAQ:SELF), one of the best dividend stocks on our list, currently pays a quarterly dividend of $0.0725 per share. In 2022, the company raised its dividend for the first time. The stock’s dividend yield on April 19 came in at 5.68%.

In March, EF Hutton Acquisition Corp maintained a Buy rating on Global Self Storage, Inc. (NASDAQ:SELF) with a $7 price target, highlighting the company’s performance this year.

As of the close of Q4 2022, 4 hedge funds tracked by Insider Monkey reported having stakes in Global Self Storage, Inc. (NASDAQ:SELF), up from 2 in the previous quarter. The collective value of these stakes is $1.3 million. Among these hedge funds, Bailard Inc was the company’s largest stakeholder in Q4.

8. Ares Commercial Real Estate Corporation (NYSE:ACRE)

Number of Hedge Fund Holders: 6

Share Price as of April 19: $9.10

Ares Commercial Real Estate Corporation (NYSE:ACRE) is an Illinois-based real estate investment trust company that manages a diversified portfolio of commercial real estate debt-related investments. In April, Keefe Bruyette maintained a Neutral rating on the stock with a $10 price target, appreciating the company’s management in the inflationary period.

Ares Commercial Real Estate Corporation (NYSE:ACRE) currently pays a quarterly dividend of $0.33 per share and has a dividend yield of 14.5%, as recorded on April 19. The company is one of the best dividend stocks on our list as it also paid a supplemental dividend of $0.02 per share this quarter.

Ares Commercial Real Estate Corporation (NYSE:ACRE) generated $30.4 million in revenues in the fourth quarter of 2022, which showed a 1% growth from the same period last year. At the end of December 2022, the company had $141.2 million in cash and cash equivalents, compared with $50.6 million in 2021.

As of the close of Q4 2022, 6 hedge funds tracked by Insider Monkey had stakes in Ares Commercial Real Estate Corporation (NYSE:ACRE), compared with 7 in the previous quarter. These stakes have a consolidated value of over $12.8 million. Dmitry Balyasny and Ken Griffin were some of the company’s leading stakeholders in Q4.

7. Ellington Residential Mortgage REIT (NYSE:EARN)

Number of Hedge Fund Holders: 7

Share Price as of April 19: $7.19

Ellington Residential Mortgage REIT (NYSE:EARN) is an American real estate investment trust company that invests and manages residential mortgage and real estate-related assets. The company is one of the best dividend stocks on our list as it offers monthly dividends to shareholders. On April 10, it declared a monthly dividend of $0.08 per share, which was in line with its previous dividend. The stock’s dividend yield came in at 13.3% on April 19.

Since the beginning of the year, Ellington Residential Mortgage REIT (NYSE:EARN) delivered a 2.57% return to shareholders and its six-month returns came in at 12.8%, as of April 19. The stock’s share price stands at $7.19.

In the fourth quarter of 2022, Ellington Residential Mortgage REIT (NYSE:EARN) reported revenue of $2.4 million and its net income stood at $11.7 million. The company had roughly $35 million available in cash and cash equivalents at the end of December 2022.

As of the close of Q4 2022, 7 hedge funds in Insider Monkey’s database reported having stakes in Ellington Residential Mortgage REIT (NYSE:EARN), the same as in the previous quarter. These stakes have a total value of over $6.67 million. Among these hedge funds, Ellington was the company’s leading stakeholder in Q4.

6. ARMOUR Residential REIT, Inc. (NYSE:ARR)

Number of Hedge Fund Holders: 7

Share Price as of April 19: $5.13

ARMOUR Residential REIT, Inc. (NYSE:ARR) is a Florida-based real estate investment trust that invests in residential mortgage-backed securities. On March 27, the company declared a monthly dividend of $0.08 per share, which was in line with its previous dividend. The stock has a dividend yield of 18.7%, as of April 19. It can be added to dividend portfolios alongside some of the best dividend stocks like American Tower Corporation (NYSE:AMT), Prologis, Inc. (NYSE:PLD), and Crown Castle Inc. (NYSE:CCI).

In the past six months, ARMOUR Residential REIT, Inc. (NYSE:ARR) delivered a 6.6% return to shareholders. The stock is currently trading at $5.13 per share, as of April 19.

In the fourth quarter of 2022, ARMOUR Residential REIT, Inc. (NYSE:ARR) reported revenue of $16.5 million and its net interest income for the quarter came in at $11.6 million. The company’s cash position remained stable during the quarter as its distributable earnings available to common shareholders stood at $38.8 million.

At the end of December 2022, 7 hedge funds in Insider Monkey’s database owned stakes in ARMOUR Residential REIT, Inc. (NYSE:ARR), down from 8 in the previous quarter. These stakes have a collective value of over $12.4 million. Ken Griffin, D. E. Shaw, and Joel Greenblatt were some of the company’s leading stakeholders in Q4.

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Disclosure. None. 10 Best REIT Stocks Under $10 is originally published on Insider Monkey.

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