Top Affordable REITs to Boost Your Portfolio Income

Investors may be pursuing opportunities to add income from dividend-paying stocks in the current market environment of uncertainty and volatility surrounding tensions in the Middle East that have led to high energy prices.

Required to pay out at least 90% of their taxable income as dividends to avoid corporate income tax, REITs are typically a great way to add income in a portfolio while getting exposure to valuable real estate assets in the process.  

Optimistically, several affordable REITs with high dividend yields have made their way onto the coveted Zacks Rank #1 (Strong Buy) list.

These REITs looked poised for more upside based on a trend of positive EPS revisions, but a further pullback in the broader market may present even more lucrative opportunities to add meaningful income-producing positions.

Blackstone Mortgage – BXMT

Stock Price: $19

Dividend Yield: 9.74%

Trading just under $20 a share, Blackstone Mortgage Trust BXMT) is the most expensive stock on the list and is hovering near a 52-week high with a one-year low of $16 a share. Blackstone is a REIT focused on loans and securities backed by commercial real estate assets, with favorable EPS projections of $1.76 in FY26 (58% increase) and $1.99 per share in FY27.

Blackstone’s tight nit 52-week range makes it appealing to build positions, considering its nearly 10% annual dividend yield and BXMT trades at a reasonable 10X forward earnings multiple.

BXMT has been a long-standing income payer, maintaining quarterly dividends through multiple rate cycles and real-estate market conditions for roughly 12 years.

Chicago Atlantic – REFI

Stock Price: $11

Dividend Yield: 16.49%

Trading at the low end of its 52-week range, Chicago Atlantic Real Estate Finance REFI) offers the highest yield on the list at over 16%. Going public in 2021, Chicago Atlantic offers exposure to first mortgage loans to state-licensed operators in the cannabis industry, secured by real estate, equipment, receivables, licenses, or other assets of the borrowers.

Having a 52-week peak of $16 a share, the risk-to-reward looks priced in with REFI having a low beta reading of 0.23. Securities with betas below 1 have historically been less volatile than the broader market, making this very lofty dividend more enticing to go after.

Furthermore, REFI trades at just 5X forward earnings, with annual EPS projected to be above $1.90 for the foreseeable future.

Chatham Lodging – CLDT

Stock Price: $8

Dividend Yield: 4.82%

Operating as a hotel REIT, Chatham Lodging Trust CLDT) invests in premium-branded upscale extended-stay and select-service hotels, including brands such as Residence Inn by Marriott, Homewood Suites by Hilton, and Summerfield Suites by Hyatt.

At under $10 a share, CLDT has an attractive dividend that’s nearly 5% and trades at a cheap 6X forward earnings multiple with EPS expected to spike 17% this year and projected to increase another 10% in FY27 to $1.32.

Reassuringly, CLDT has a very low volatile 52-week range of $6.08-$8.60. It’s also noteworthy that outside of the hotel-wide industry disruptions during the pandemic (2020-2022 dividend suspension), the company has consistently paid a dividend since going public in 2010. Plus, Chatham Lodging pays its dividends monthly as opposed to quarterly, being the only REIT on the list to do so.

Redwood Trust – RWT

Stock Price: $5

Dividend Yield: 12.29%

We’ll end with Redwood Trust RWT), the cheapest REIT stock on the list at $5 a share and trading at just 4X forward earnings. Redwood specializes in acquiring and managing real estate mortgage assets, which may be acquired as whole loans or as mortgage securities representing interests in or obligations backed by pools of mortgage loans.

RWT has a tight 52-week range of $4.85-$6.97, making its 12% annual dividend yield very appealing. Even better, EPS is expected to leap 45% to $1.28 in FY26 compared to $0.88 per share last year. Fiscal 2027 EPS is projected to contract to $0.98, but estimates are up from $0.92 per share two months ago.

While Redwood Trust doesn’t classify as a Dividend Aristocrat as it hasn’t consistently increased its dividend for at least 25 consecutive years, it has still reliably paid a dividend for 31 years, since going public in 1995 and being the longest standing REIT on the list.

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Redwood Trust, Inc. (RWT) : Free Stock Analysis Report

Chatham Lodging Trust (REIT) (CLDT) : Free Stock Analysis Report

Blackstone Mortgage Trust, Inc. (BXMT) : Free Stock Analysis Report

Chicago Atlantic Real Estate Finance, Inc. (REFI) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.