Two real estate investment trusts trading between $5 and $10 per share are drawing attention for their ultra-high dividend yields, with analysts suggesting they could deliver strong passive income returns by 2026. The focus is on yield sustainability amid rising interest rate expectations.
- REIT1 and REIT2 offer dividend yields of 11.8% and 12.3%, respectively, as of December 2025
- Both stocks are priced between $5 and $10 per share, enhancing yield-on-cost metrics
- Dividend coverage ratios are 1.3x for REIT1 and 1.4x for REIT2, indicating sustainable payouts
- Occupancy rates exceed 94%, supporting stable cash flows and rent collection
- Investors may gain over $1,200 annually from a $10,000 investment in either stock
- Market sentiment remains cautious, with shares trading near 52-week lows
Investors seeking reliable income streams are turning to a select group of equities priced between $5 and $10, particularly within the real estate and utilities sectors. Among these, two REITs—REIT1 and REIT2—stand out for their combined dividend yields exceeding 11%, with REIT1 yielding 11.8% and REIT2 at 12.3% as of late December 2025. Both companies operate in multifamily residential and industrial real estate, sectors showing resilience in a high-rate environment. The appeal lies in the combination of low share prices and high payouts. At current levels, a $10,000 investment in REIT1 would generate approximately $1,180 in annual income, while REIT2 would return $1,230. These figures represent a significant outperformance over government bond yields, which remain below 4.5% for 10-year Treasuries. Analysts note that both firms maintain conservative leverage ratios and stable occupancy rates above 94%, supporting the sustainability of their distributions. Market reaction has been cautious, with both stocks trading near their 52-week lows. This valuation gap may reflect concerns over refinancing risks in a high-rate climate, but some institutional investors see the current downturn as an opportunity to accumulate income at enhanced yields. The dividend coverage ratio for REIT1 is 1.3x, and REIT2 stands at 1.4x, suggesting a buffer against near-term earnings fluctuations. The broader impact includes increased interest from dividend-focused ETFs and robo-advisory platforms that are adjusting allocations toward high-yield, low-priced equities. While these stocks are not without risk, their yield-to-price ratio and underlying asset quality have positioned them as potential candidates for long-term passive income portfolios entering 2026.