BOSTON ( TheStreet) -- Federal Reserve officials reiterated yesterday that they will keep interest rates near a record low of about zero for an "extended period" because inflation is under control and unemployment is still near a 26-year high.

Goldman Sachs ( GS) economist Edward McKelvey predicts Fed policymakers won't increase rates until 2012. If so, real estate investment trusts, or REITs, which thrive on low rates, are poised to extend gains. REITs are required to pay 90% of their income to investors, so they offer high yields.

Here are analysts' 10 favorite REITs, based on median ratings. Mortgage REITs, in particular, will benefit if the Fed remains steadfast in its commitment to low interest rates. Concerns about slower U.S. economic growth and Europe's debt crisis have increased the relevance of dividends.

The Vanguard REIT ETF ( VNQ) has advanced 11% this year, while the large-cap S&P 500 Index has dropped 2.1%. Investors seeking income should investigate these REITs first. Of note: REIT distributions are taxed differently than dividends.

10. Rayonier ( RYN) owns timberland and sells cellulose fibers.

Quarter: First-quarter profit more than doubled to $57 million, or 71 cents a share, as revenue grew 11%. The operating margin extended from 14% to 19%. Rayonier has $153 million of cash and $762 million of debt, equaling a debt-to-equity ratio of 0.6.

Stock: Rayonier has advanced 30% during the past year, outperforming U.S. stock indices. It trades at a price-to-projected-earnings ratio of 21 and a price-to-cash-flow ratio of 11, reflecting 65% and 38% discounts to REIT industry averages.

Consensus: Of analysts covering Rayonier, four, or 44%, advise purchasing its shares and five recommend holding them. None suggest selling. Deutsche Bank ( DB) expects the stock to climb 21% to $55. Soleil Securities offers a target of $53.

9. Hatteras Financial ( HTS) invests in residential mortgage-backed securities.

Quarter: First-quarter profit increased 13% to $44 million, or $1.21, as revenue grew 3.6%. The operating margin remained steady at 96%. Hatteras Financial has $118 million of cash and $6.1 billion of debt, converting to a debt-to-equity ratio of 6.6.

Stock: Hatteras Financial has risen 9.2% during the past 12 months, trailing U.S. stock benchmarks. It sells for a price-to-projected-earnings ratio of 6.6 and a price-to-cash-flow ratio of 5.2, indicating 89% and 71% discounts to REIT peer averages.

Consensus: Of researchers following Hatteras Financial, eight, or 57%, advocate purchasing its shares, five recommend holding and one says to sell them. Macquarie ( MQBKY) offers a target of $35, leaving a potential return of 20%.

8. Health Care REIT ( HCN) invests in skilled nursing and assisted living facilities.

Quarter: First-quarter profit tumbled 53% to $31 million, or 16 cents, as revenue gained 11% to $154 million. The operating margin narrowed from 55% to 49%. Health Care REIT holds $2.8 billion of debt, equaling a debt-to-equity ratio of 0.8.

Stock: Health Care REIT has appreciated 26% during the past year, more than the S&P 500 Index. It trades at a price-to-projected-earnings ratio of 26 and a price-to-book ratio of 1.4, reflecting 57% and 36% discounts to industry averages.

Consensus: Of firms evaluating Health Care REIT, eight, or 50%, rate its stock "buy" and eight rate it "hold." Jefferies ( JEF), JPMorgan ( JPM) and BMO Capital Markets ( BMO) offer a price target of $48, leaving a potential return of 14%.

7. Federal Realty Investment Trust ( FRT) owns retail and mixed-use properties.

Quarter: First-quarter profit nearly tripled to $29 million, or 47 cents, as revenue ascended 5.7% to $139 million. The operating margin inched up from 42% to 43%. Federal Realty has $1.7 billion of debt, converting to a debt-to-equity ratio of 1.4.

Stock: Federal Realty Investment Trust has risen 46% during the past 12 months, outpacing U.S. stock indices. It sells for a price-to-projected-earnings ratio of 34, a 44% discount to its peer average. It's expensive based on book value and sales.

Consensus: Of analysts covering Federal Realty, 12, or 63%, advise purchasing its shares, six recommend holding and one suggests selling them. Sandler O'Neill expects the stock to rise 22% to $88. Janney Montgomery predicts that it will hit $87.

6. Simon Property Group ( SPG) owns malls and shopping centers.

Quarter: First-quarter profit tumbled 87% to $15 million, or 3 cents, as revenue inched up 2%. The operating margin stretched from 40% to 47%. Simon has $3.3 billion of cash and $18 billion of debt, translating to a debt-to-equity ratio of 3.8.

Stock: Simon Property Group has soared 71% during the past year, beating U.S. benchmarks by a wide margin. It trades at a price-to-projected-earnings ratio of 33, a 45% discount to the industry average. It's expensive based on book value and sales.

Consensus: Of researchers following Simon, 17, or 71%, advise purchasing its shares, six counsel holding and one recommends selling them. Deutsche Bank ( DB) forecasts that the stock will gain 23% to $105. Stifel Financial ( SF) offers a target of $100.

5. MFA Financial ( MFA) manages a portfolio of mortgage-backed securities.

Quarter: First-quarter profit surged 54% to $83 million, or 29 cents, as revenue grew 7.7%. The operating margin declined from 96% to 95%. MFA Financial holds $808 million of cash and $6 billion of debt, equaling a debt-to-equity ratio of 2.7.

Stock: MFA Financial has appreciated 15% during the past year, trailing indices. It sells for a price-to-projected-earnings ratio of 7.6, a price-to-book ratio of 0.9 and a price-to-sales ratio of 4, 87%, 57% and 36% discounts to peer averages.

Consensus: Of firms evaluating MFA Financial, 10, or 71%, rate its stock "buy" and four rank it "hold." None rate the stock a "sell." FBR Capital Markets ( FBCM) forecasts that the stock will rise 20% to $9. KBW ( KBW) offers a target of $8.50.

4. Capstead Mortgage ( CMO) is a self-managed mortgage REIT.

Quarter: First-quarter profit declined 3.9% to $40 million, or 51 cents, as revenue dropped 32%. The operating margin declined from 96% to 93%. Capstead has $243 million of cash and $7.2 billion of debt, converting to a debt-to-equity ratio of 7.1.

Stock: Capstead has fallen 14% during the past 12 months, underperforming U.S. benchmarks. It trades at a price-to-projected-earnings ratio of 6.4 and a price-to-book ratio of 0.8, demonstrating 89% and 64% discounts to REIT industry averages.

Consensus: Of analysts covering Capstead Mortgage, eight, or 73%, advise purchasing its shares and three counsel holding them. Macquarie offers a target of $16, leaving a potential return of 41%. Deutsche Bank expects the stock to hit $14.

3. Chimera Investment ( CIM) invests in mortgage-backed and asset-backed securities.

Quarter: First-quarter profit increased six-fold to $126 million, or 19 cents, as revenue grew by a comparable amount. The operating margin widened from 87% to 95%. The balance sheet stores $3.7 billion of debt, converting to a debt-to-equity ratio of 1.6.

Stock: Chimera Investment has climbed 15% during the past year, lagging behind U.S. indices. It sells for a price-to-projected-earnings ratio of 5.2, a price-to-book ratio of 1.1 and a price-to-cash-flow ratio of 13, 91%, 49% and 25% discounts to peer averages.

Consensus: Of researchers following Chimera, six, or 75%, advocate purchasing its shares and two recommend holding them. Sterne, Agee & Leach offers a target of $5.25, leaving 42% of potential upside. JMP ( JMP) offers a target of $4.50.

2. Redwood Trust ( RWT) invests in non-agency mortgage-backed securities.

Quarter: Redwood swung to a first-quarter profit of $47 million, or 58 cents, from a loss of $35 million, or 65 cents, a year earlier. The operating margin fell from 67% to 54%. Redwood has $4 billion of debt, equaling a debt-to-equity ratio of 4.

Stock: Redwood has advanced 14% during the past 12 months, trailing indices. It trades at a price-to-projected-earnings ratio of 11, a price-to-book ratio of 1.2 and a price-to-cash-flow ratio of 5.4, 82%, 44% and 69% discounts to peer averages.

Consensus: Of firms evaluating Redwood, six, or 86%, rate its stock "buy" and one ranks it "hold." None rate Redwood a "sell." Macquarie forecasts that the stock will climb 63% to $26. Jefferies predicts that the shares will advance 25% to $20.

1. Anworth Mortgage ( ANH) invests in agency mortgage-backed securities.

Quarter: First-quarter net income increased 8.2% to $33 million, but earnings per share fell 10% to 27 cents. Revenue declined 8.7%. The operating margin remained steady at 94%. Anworth has $5.3 billion of debt, converting to a debt-to-equity ratio of 5.6.

Stock: Anworth has appreciated 2.6% during the past year, lagging behind indices. It sells for a price-to-projected-earnings ratio of 6.7, a price-to-book ratio of 0.9 and a price-to-cash-flow ratio of 2.6, 89%, 60% and 85% discount to industry averages.

Consensus: Of analysts covering Anworth, all 10 advocate purchasing its shares. None rank the stock "hold" or "sell." Deutsche Bank values Anworth at $9, leaving 26% of potential upside. Credit Suisse ( CS) offers a more modest target of $8.

-- Reported by Jake Lynch in Boston.

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