In a challenging market environment, characterized by recent sell-offs following new tariff policies, investors may find refuge in dividend-paying stocks. One sector offering attractive dividends is Real Estate Investment Trusts (REITs), which have shown resilience compared to the broader market indices.

Market Overview

Since reaching a peak on February 19, 2025, the Nasdaq Composite index has faced a decline of 19%, while the MSCI US REIT Index has experienced a smaller loss of over 7% year-to-date. Bank of America analysts have highlighted the relative stability of the REIT sector during this broader market selloff.

Top Performing REIT Sectors

Within the REIT landscape, certain sectors have outperformed others:

• Healthcare
• Residential
• Towers
• Net Lease

Conversely, sectors such as retail, data centers, and office spaces have lagged behind.

Five REITs Worth Considering

Analyst Jeffrey Spector has identified five REITs that currently appear undervalued based on their adjusted funds from operations (AFFOs) relative to share prices. Here’s a closer look at each:

1. Americold Realty Trust

   This REIT specializes in temperature-controlled warehouses worldwide and is currently facing a downturn, with its stock price dropping over 10% recently, leading to a 52-week low. The stock offers a dividend yield of 4.7%, and Spector sets a target price of $30, indicating a potential 47% upside.

2. Getty Realty

   Focusing on single-tenant retail properties, particularly in automotive and convenience sectors, Getty Realty boasts a dividend yield of 6.3% and has remained relatively stable throughout the year. Spector’s target price of $35 suggests a 15% increase from its recent closing value.

3. Healthpeak Properties

   With a diverse portfolio including senior living facilities and medical office buildings, Healthpeak Properties yields 6.5%. Despite an 8% drop this year, Spector forecasts a target price of $25, a 28% potential increase from its latest closing price.

4. Sabra Health Care

   Specializing in skilled nursing and behavioral health facilities, Sabra offers nearly a 7% dividend yield and has remained flat in terms of stock performance this year. With a target price of $21, Spector anticipates a 19% upside.

5. Kite Realty Group

   This REIT operates open-air shopping centers and mixed-use developments with a current yield of about 5.2%. Following a 17% decline in stock value thus far this year, Spector’s target price of $28 suggests a 30% rally could be on the horizon.

Conclusion

As the market continues to adjust to ongoing volatility, investing in dividend-paying REITs could provide both income and potential growth opportunities. Assessing the fundamentals and market positions of these trusts may aid investors in navigating uncertain times.