Real Estate Investment Trusts (REITs) have long been a popular choice for investors seeking passive income. With the recent interest rate cuts by the Federal Reserve, REIT investing is back in style. This presents a great opportunity for investors to capitalize on undervalued REIT shares currently trading for less than $10. Let’s take a closer look at some of these REIT stocks that offer the potential for passive income.
Global Net Lease (GNL) is a REIT that specializes in net-leased retail properties across the U.S. and Europe. Net leases are advantageous for investors as they involve long-term tenants who pay portions of the insurance, property tax, and maintenance costs for their spaces. GNL boasts a highly diversified portfolio of over 1,200 properties in nearly a dozen countries worldwide. The company recently reported a strong Q2 2024, with a 2% increase in adjusted funds from operation (AFFO) and a reduction of $251 million in debt. With interest rates falling and leasing activity picking up, GNL could offer significant returns to investors. Currently trading at $7.98 per share and paying a 13.82% dividend, GNL is a promising option for those looking to earn passive income.
AGNC Investment is a mortgage REIT that relies on investor capital and borrowed funds to purchase mortgage-backed securities (MBS) portfolios. Despite the potential risks associated with fluctuating interest rates, AGNC has managed to maintain a 55-consecutive month streak of paying shareholder dividends. The company’s ability to borrow money at a lower rate than the interest rate on its MBS portfolio has enabled it to offer a double-digit dividend in the 15% range. With interest rates expected to continue declining in 2025, AGNC is well-positioned to deliver even more profits to investors.
Medical Properties Trust (MPW) is a health care REIT with a portfolio of over 43,000 beds and 436 assets spread across the U.S., the United Kingdom, and Europe. While the company faced challenges earlier this year due to the bankruptcy of one of its largest tenants, Steward Health, recent developments have been positive. MPW closed a partnership deal with Astrana Health to acquire a managed care portfolio from Prospect for $745 million, resulting in a $200 million cash infusion in 2025. With shares trading at $4.65 and paying a 7% dividend, MPW has the potential for strong rebounds in 2025 as it navigates through recent challenges.
In conclusion, investing in REIT stocks selling for under $10 per share can be a lucrative way to earn passive income. Whether you choose Global Net Lease, AGNC Investment, Medical Properties Trust, or other REITs, it’s essential to conduct thorough research and consider the potential risks and rewards. With the right strategy and a diversified portfolio, investors can benefit from the income-generating potential of these undervalued REIT stocks.
