The Federal Reserve may have set the ball rolling for interest rate increases, but the stock market's decline early this year and concerns about global growth could mean U.S. rates rise very slowly.
Sustained lower interest rates will make high-yield real estate investment trusts a popular investment in this volatile market.
One undervalued REIT is Blackstone Mortgage Trust (BXMT) , a real estate finance company that originates and acquires senior loans collateralized by properties in North America and Europe. It's among the best growth-and-income plays you can find right now.
When interest rates are low, Blackstone Mortgage Trust is a great investment, with its attractive yield and great potential for earnings growth.
For starters, the company has an extremely attractive dividend yield of nearly 9.5%.
The REIT's senior mortgage lending business grew at an incredible pace in 2015, and management said it drove a 31% increase in core earnings per share. Its acquisition of GE Capital Real Estate mortgage loan portfolio provides it with added muscle to achieve higher earnings.
Company executives say that their focus on senior loans that Blackstone sources and underwrites positions the REIT to succeed in difficult markets. They say they've avoided higher-risk mezzanine loans and don't own any commercial mortgage-backed securities.