Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 stocks made the list for top value stocks in the Mortgage Real Estate Investment Trusts (REITs) industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Mortgage Real Estate Investment Trusts (REITs) Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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6 Undervalued Mortgage Real Estate Investment Trusts (REITs) Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 6 undervalued stocks in the Mortgage Real Estate Investment Trusts (REITs) industry for Friday, February 20, 2026. Let’s take a closer look at their individual scores to see how they measure up against each other and the Mortgage Real Estate Investment Trusts (REITs) industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Ladder Capital Corp’s Value Grade

Value Grade:

Ladder Capital Corp operates as an internally-managed real estate investment trust in the United States. It operates through three segments: Loans, Securities, and Real Estate. The Loans segment originates and acquires balance sheet loans that provide interim financing to borrowers seeking short-term capital for the acquisition or transition of commercial real estate; originates conduit loans, which are first mortgage loans on commercial real estate properties for sale in commercial mortgage-backed securities securitizations; and invests in note purchase financings, subordinated debt, mezzanine debt, and other structured finance products related to commercial real estate. Its Securities segment invests in CMBS, U.S. Agency securities, corporate bonds, equity securities, and U.S. Treasury securities that are not classified as cash and cash equivalents. The Real Estate segment engages in net leased properties, other diversified real estate, and investments in unconsolidated ventures. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Ladder Capital Corp was founded in 2008 and is headquartered in New York, New York.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Ladder Capital Corp has a Value Score of 66, which is considered to be undervalued.

When you look at Ladder Capital Corp’s price-to-sales ratio at 6.08 compared to the industry median at 4.40, this company has a higher price relative to revenue compared to its peers. This could make Ladder Capital Corp’s stock less attractive for value investors.

Ladder Capital Corp’s price-earnings ratio is 20.50 compared to the industry median at 12.00. This means it has a higher share price relative to earnings compared to its peers. This could make Ladder Capital Corp less attractive for value investors.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Ladder Capital Corp’s shareholder yield is higher than its industry median ratio of 9.00%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Ladder Capital Corp’s price-to-book ratio is higher than its industry median ratio of 0.79. This could make Ladder Capital Corp less attractive to investors looking for a new addition to their portfolio.

PennyMac Mortgage Investment Trust’s Value Grade

Value Grade:

PennyMac Mortgage Investment Trust, through its subsidiary, primarily invests in residential mortgage-related assets in the United States. The company operates through: Credit Sensitive Strategies, Interest Rate Sensitive Strategies, and Correspondent Production segments. The Credit Sensitive Strategies segment invests in credit risk transfer (CRT) agreements and subordinate and credit-linked mortgage-backed securities (MBS). The Interest Rate Sensitive Strategies segment engages in investing in mortgage servicing rights, agency and senior non-agency MBS, and collateralized mortgage obligations (CMOs), as well as interest rate hedging activities. The Correspondent Production segment is involved in purchasing, pooling, and reselling newly originated prime credit quality loans directly or in the form of MBS. The company primarily sells its loans to government-sponsored enterprises. It has elected to be taxed as a real estate investment trust (REIT). It is not subject to U.S. federal income tax on the REIT taxable income it distributes to its shareholders. PennyMac Mortgage Investment Trust was incorporated in 2009 and is headquartered in Westlake Village, California.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

PennyMac Mortgage Investment Trust has a Value Score of 92, which is considered to be undervalued.

PennyMac Mortgage Investment Trust’s price-earnings ratio is 13.5 compared to the industry median at 12.0. This means that it has a higher price relative to its earnings compared to its peers. This makes PennyMac Mortgage Investment Trust less attractive for value investors.

PennyMac Mortgage Investment Trust’s price-to-book ratio is lower than its peers. This could make PennyMac Mortgage Investment Trust fairly attractive for value investors when compared to the industry median at 0.79.

You can read more about PennyMac Mortgage Investment Trust’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Chicago Atlantic Real Estate Finance, Inc.’s Value Grade

Value Grade:

Chicago Atlantic Real Estate Finance, Inc. operates as a commercial mortgage real estate investment trust in the United States. The company engages in originating, structuring, and investing in first mortgage loans and alternative structured financings secured by commercial real estate properties. Its portfolio primarily includes first mortgage loans to established multi-state or single-state cannabis operators or property owners. The company has elected to be taxed as a real estate investment trust (REIT) and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Chicago Atlantic Real Estate Finance, Inc. was incorporated in 2021 and is based in Miami Beach, Florida.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Chicago Atlantic Real Estate Finance, Inc. has a Value Score of 89, which is considered to be undervalued.

Chicago Atlantic Real Estate Finance, Inc.’s price-earnings ratio is 6.9 compared to the industry median at 12.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Chicago Atlantic Real Estate Finance, Inc. more attractive for value investors.

Chicago Atlantic Real Estate Finance, Inc.’s price-to-book ratio is lower than its peers. This could make Chicago Atlantic Real Estate Finance, Inc. fairly attractive for value investors when compared to the industry median at 0.79.

You can read more about Chicago Atlantic Real Estate Finance, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Rithm Capital Corp.’s Value Grade

Value Grade:

Rithm Capital Corp. operates as an asset manager focused on real estate, credit, and financial services in the United States. It operates through Origination and Servicing, Investment Portfolio, Residential Transitional Lending, and Asset Management segments. The company’s investment portfolio primarily comprises of single-family rental properties, title, appraisal and property preservation and maintenance businesses; real estate securities, call rights, SFR properties, and residential mortgage loans; consumer and business purpose loans; and asset management related investments. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was formerly known as New Residential Investment Corp. and changed its name to Rithm Capital Corp. in August 2022. Rithm Capital Corp. was incorporated in 2011 and is based in New York, New York.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Rithm Capital Corp. has a Value Score of 83, which is considered to be undervalued.

Rithm Capital Corp.’s price-earnings ratio is 7.3 compared to the industry median at 12.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Rithm Capital Corp. more attractive for value investors.

Rithm Capital Corp.’s price-to-book ratio is lower than its peers. This could make Rithm Capital Corp. fairly attractive for value investors when compared to the industry median at 0.79.

You can read more about Rithm Capital Corp.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Redwood Trust, Inc.’s Value Grade

Value Grade:

Redwood Trust, Inc., together with its subsidiaries, operates as a specialty finance company in the United States. It operates through three segments: Sequoia Mortgage Banking, CoreVest Mortgage Banking, and Redwood Investments. The Residential Consumer Mortgage Banking segment operates a mortgage loan conduit that acquires residential loans from third-party originators for subsequent sale, securitization, or transfer to its investment portfolio. This segment also offers derivative financial instruments to manage risks associated with residential loans. Its CoreVest Mortgage Banking segment operates a platform that originates business purpose loans to investors in single-family and multifamily residential properties and bridge loans for subsequent securitization, sale, or transfer into its investment portfolio. The Redwood Investments segment invests in securities retained from residential consumer and investor securitization activities, and business purpose lending bridge loans, as well as residential mortgage-backed securities issued by third parties, Freddie Mac K-Series multifamily loan securitizations and reperforming loan securitizations, servicer advance investments, home equity investments, and other housing-related investments. The company is elected to be taxed as a real estate investment trust (REIT) for federal income tax purposes. Redwood Trust, Inc. was incorporated in 1994 and is headquartered in Mill Valley, California.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Redwood Trust, Inc. has a Value Score of 75, which is considered to be undervalued.

Redwood Trust, Inc.’s price-to-book ratio is lower than its peers. This could make Redwood Trust, Inc. more attractive for value investors when compared to the industry median at 0.79.

You can read more about Redwood Trust, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Two Harbors Investment Corp.’s Value Grade

Value Grade:

Two Harbors Investment Corp. invests in, finances, and manages mortgage servicing rights (MSRs), agency residential mortgage-backed securities (RMBS), and other financial assets through RoundPoint in the United States. The company target assets include agency RMBS collateralized by fixed rate mortgage loans, adjustable rate mortgage loans, hybrid mortgage loans, or derivatives; and other assets, such as financial and mortgage-related assets, comprising non-agency securities and non-hedging transactions. It qualifies as a REIT for federal income tax purposes. The company was incorporated in 2009 and is headquartered in Saint Louis Park, Minnesota.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Two Harbors Investment Corp. has a Value Score of 89, which is considered to be undervalued.

Two Harbors Investment Corp.’s price-to-book ratio is lower than its peers. This could make Two Harbors Investment Corp. more attractive for value investors when compared to the industry median at 0.79.

You can read more about Two Harbors Investment Corp.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Mortgage Real Estate Investment Trusts (REITs) Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Mortgage Real Estate Investment Trusts (REITs) stocks as well as other industrys.

Choosing Which of the 6 Best Mortgage Real Estate Investment Trusts (REITs) Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Ladder Capital Corp stock has a Value Grade of B.
• PennyMac Mortgage Investment Trust stock has a Value Grade of A.
• Chicago Atlantic Real Estate Finance, Inc. stock has a Value Grade of A.
• Rithm Capital Corp. stock has a Value Grade of A.
• Redwood Trust, Inc. stock has a Value Grade of B.
• Two Harbors Investment Corp. stock has a Value Grade of A.

Now that you have a bit more background about each of the 6 undervalued stocks in the Mortgage Real Estate Investment Trusts (REITs) industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Mortgage Real Estate Investment Trusts (REITs) Stocks

Want to learn more about Mortgage Real Estate Investment Trusts (REITs) stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 6 Undervalued Mortgage Real Estate Investment Trusts (REITs) Stocks for Friday, February 20
• 3 Undervalued Mortgage Real Estate Investment Trusts (REITs) Stocks for Thursday, February 19
• Why Claros Mortgage Trust, Inc.’s (CMTG) Stock Is Down 5.71%
• What You Need to Know About BrightSpire Capital, Inc.'s Q1 Earnings

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