Even without rate cut assistance from the Federal Reserve, the real estate sector is delivering the goods for investors this year. Count the ALPS REIT Dividend Dogs ETF (RDOG ) among the real estate ETFs displaying leadership traits.
RDOG, which turned 18 years old in May, focuses on the highest-yielding REITs across nine of the real estate sector’s sub-segments. Within the ALPS ETF, those segments are equally weighted, a strategy that enhances diversification while diminishing concentration risk.
RDOG is doing something right, because the ETF is up 15.1% year-to-date. Plus, it sports an enticing trailing 12-month dividend yield of 6.09%. That’s far above average among standard real estate ETFs. The ETF’s high yield and its 2026 performance may imply that it doesn’t have much of a value proposition. Upon further examination, though, there are some value plays residing in this ETF.
To RDOG for Value
Real estate is a defensive sector, and there are times when those groups trade at valuations in excess of the broader market. It’s the price of admission for accessing that defensive posture. But to RDOG’s credit, some of its holdings look undervalued today. That includes dividend stalwart Realty Income (O).
“Coverage ratios are also very high, so tenants are healthy and unlikely to request rent concessions, even during downturns,” noted Morningstar analyst Kevin Brown. “The steady, stable stream of revenue has allowed Realty Income to be one of only two REITs to be members of the S&P High-Yield Dividend Aristocrats Index and have a credit rating of A- or better. This makes Realty Income one of the most dependable investments for income-oriented investors.”
Wireless tower REIT American Tower (AMT), also a member of the RDOG lineup, is another example of a REIT which Morningstar believes is offering some value today.
“We like management’s push into international markets, where growth opportunities are stronger. Many international markets, especially in Africa, are still progressing through 4G. Continued investment in new technologies, amid soaring data consumption, should drive international growth,” observed Michael Hodel of Morningstar.
Crown Castle (CCI), SBA Communications (SBAC), and Park Hotels & Resorts (PK) are other examples of RDOG components Morningstar considers undervalued.
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