Buy the Dip in these Intriguing REITs: DBRG, IVR, NYMT

Zacks highlighted DigitalBridge Group (DBRG), Invesco Mortgage Capital (IVR), and New York Mortgage Trust (NYMT) as REITs with "Strong Buy" ratings and trading under $12, presenting potential bargain opportunities. DBRG is focused on digital infrastructure and expects over 20% EPS growth in fiscal 2025 and FY26, while IVR offers an 18.5% annual dividend despite projected EPS declines, and NYMT anticipates a bottom-line rebound with a 12.26% dividend and spiked EPS estimates for FY25 and FY26.

Analysis

Zacks Investment Research identifies DigitalBridge Group (DBRG), Invesco Mortgage Capital (IVR), and New York Mortgage Trust (NYMT) as compelling Real Estate Investment Trusts (REITs) for potential 'buy the dip' opportunities, all carrying a Zacks Rank #1 (Strong Buy) and trading under $12 per share. DigitalBridge Group, priced at $11, focuses on digital infrastructure assets like fiber networks, cell towers, and data centers, critical for 5G, cloud computing, and AI growth. With over $100 billion in assets, DBRG anticipates over 20% EPS growth in both fiscal 2025 and 2026, and its stock has rallied from a 52-week low of $6 to $11, though still 34% below its $17 high. Invesco Mortgage Capital, trading at $7, manages mortgage-backed securities and offers a significant 18.5% annual dividend. However, IVR faces projected EPS declines to $2.26 this year from $2.88 in 2024, with a further 12% dip expected in FY26, raising questions about dividend sustainability despite rapid top-line expansion and a low-volatility 52-week range of $5.86-$9.97. New York Mortgage Trust, priced at $6, is expected to see a significant bottom-line rebound and offers a 12.26% annual dividend. NYMT trades at a 10.5x forward earnings multiple, also exhibits low 52-week price volatility, and has seen its FY25 and FY26 EPS estimates increase notably over the past 60 days, supported by its leveraged residential mortgage securities portfolio and mortgage origination business. Ares Commercial Real Estate (ACRE) and Braemar Hotels & Resorts (BHR) are also mentioned as affordable REITs with Strong Buy ratings, expected positive adjusted EPS next year, and high dividend yields of 13.27% and 10% respectively.

Key Decisions for Investors

• Investors may consider these Zacks Rank #1 (Strong Buy) REITs trading under $12—DBRG, IVR, and NYMT—for potential 'buy the dip' strategies as economic uncertainty reportedly fades.
• DigitalBridge Group (DBRG) could appeal to growth-focused investors due to its strategic position in digital infrastructure and projected EPS growth exceeding 20% for FY25 and FY26, though its significant rebound from 52-week lows should be noted.
• For income-oriented investors, Invesco Mortgage Capital (IVR) and New York Mortgage Trust (NYMT) offer high current dividend yields (18.5% and 12.26% respectively); however, IVR's projected EPS declines warrant scrutiny of its dividend sustainability, whereas NYMT's anticipated earnings rebound and positive EPS estimate revisions provide a more favorable outlook for its dividend.
• Evaluate the risk-reward profile associated with these lower-priced REITs, paying close attention to the underlying fundamentals supporting dividend payments and growth prospects, particularly the divergence in EPS outlooks between IVR and NYMT.