"It has been trading sideways since 2023 due to a variety of issues. Namely, interest rates have been too high, and this hasn't given REITs the room to recover. Remember, REITs are businesses with high debt loads and high interest rates, which puts disproportionate pressure on them. However, these REITs have been able to avert the worst. They've drawn lessons from 2008, and most of them have paid growing dividends in the past couple of years and have even expanded them."
"People often choose the best-performing dividend stocks over the past few years to build their portfolio. But sometimes, choosing undervalued names like Pacer Industrial Real Estate ETF (NYSEARCA:INDS), VanEck Gaming ETF (NASDAQ:BJK), and the Xtrackers S&P Dividend Aristocrats Screened ETF (BATS:SNPD) can amplify your gains. The current environment has left very few names that can be characterized as "undervalued". These three ETFs are among the only ones that hold discounted stocks and pay you dividends for it."
Many investors select recent best-performing dividend stocks to construct portfolios. Undervalued ETFs such as Pacer Industrial Real Estate ETF (INDS), VanEck Gaming ETF (BJK), and Xtrackers S&P Dividend Aristocrats Screened ETF (SNPD) hold discounted stocks while paying dividends. ETFs composed of expensive stocks have delivered strong returns but offer less safety. These undervalued ETFs could outperform as interest rates decline and underlying holdings recover. INDS is down over 31% from its 2021 peak and has traded sideways since 2023 amid high interest rates that pressure highly leveraged REITs. Many industrial REITs have maintained or increased dividends and offer exposure to e-commerce and last-mile distribution. INDS yields about 3.5% with a 0.49% expense ratio and presents notable upside potential.
Read at 24/7 Wall St.
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