10 Cheap REITs with Huge Upside

2. Rithm Capital Corp. (NYSE:RITM)

Average Upside Potential: 23.11%

Forward P/E: 5.68

Number of Hedge Funds: 25

Rithm Capital Corp. (NYSE:RITM) is an asset manager focused on real estate and financial services. The firm invests across a variety of real estate and financial services assets some of which include residential mortgage loans, consumer loans, residential transitional loans, and commercial real estate. Rithm has a family of operating companies including Newrez, Shellpoint, Genesis Capital, Guardian, Avenue 365 Lender Services, eStreet, Adoor, GreenBarn, and Sculptor.

Rithm has grown from a manager of just mortgage servicing rights to an investment platform with an opportunistic portfolio across the real estate and financial services sectors. The firm has a distinct competitive advantage in the form of vertically integrated operating companies with capabilities in direct asset sourcing, asset optimization, and capital markets. Rithm’s diversified portfolio of investments and operating companies has a record of performing amidst changing economic conditions.

The second quarter reflected the strength of Rithm’s core businesses. The firm posted GAAP net income of $213.2 million and earnings available for distribution of $0.47 per diluted common share. The overall momentum remained robust with the continued growth of the Newrez franchise, Genesis Capital producing a near-record level of originations at $836 million, and Rithm completing the transaction to serve as the external manager to the mortgage REIT Great Ajax (NYSE: AJX).

While the firm was founded in 2013 under Fortress Investment Group to capitalize on an investment opportunity in mortgage servicing rights, it has delivered more than 10 years of stable results. Its diversified and strong platform positions Rithm Capital Corp. (NYSE:RITM) to continue its growth trajectory as a leading global asset manager.