As we roll towards the close of 2023, Real Estate Investment Trusts (REITs) aren't quite the hottest investment on Wall Street, with many names in the group coming under pressure amid a post-COVID migration by workers out of commercial real estate and into their own homes. 

However, REITs are as popular as ever with income investors, and for good reason. These companies, which own real estate or real estate-backed assets, have to pay back 90% of their taxable income to shareholders each year as dividends - resulting in some fairly rich yields.

Despite fundamental challenges, there are some low-priced names in the REIT space with diverse portfolios and robust yields that are worth considering at current levels. Here's a look at three potential high-yield hidden gems.

Apple Hospitality: A Bite of the High-End Hotel Industry

Apple Hospitality REIT (APLE) holds a portfolio packed with high-end hospitality names like Marriott (MAR), Hilton (HLT), and Hyatt (H). The shares are up 6% year-to-date to hover just below $16, lagging the broader S&P 500 Index ($SPX).

With a market cap of $3.8 billion and a forward P/AFFO ratio of 11.49, which compares favorably to its peers, APLE looks attractive priced. Plus, the company pays a monthly dividend, with the yield topping 6%.

Just a few days ago, in its latest quarterly earnings report, APLE beat Wall Street's expectations on both the top and bottom line. Looking ahead, earnings are expected to grow more than 3% in the next fiscal year.

The average rating out of 8 analysts tracking APLE is a “moderate buy,” with 5 saying it's a “strong buy,” and 3 more saying “hold.” The mean target price from this crew is $18.33, suggesting 15% upside from here. 

Rithm Capital Corp: An Asset-Focused REIT

Rithm Capital Corp (RITM) holds an investment portfolio comprised of mortgage, residential, and consumer loans, with most of its assets in lending and servicing. The New York-based firm has a market cap of $4.68 billion.

RITM has beaten the broader market on a YTD basis, up more than 30% since the start of the year. The stock ended Friday narrowly below $10 per share. 

Along with that outsized capital appreciation, RITM also offers a dividend yield in excess of 10%, paid quarterly. And when it comes to earnings, RITM beat analysts' estimates with its late-October report, continuing a trend of topping Wall Street's expectations. 

Analysts are fans, with an average “moderate buy” rating and a mean target price of $11.57 suggesting 18% potential upside. Out of six analysts in coverage, there are 3 “strong buys,” 2 “moderate buys,” and 1 “hold.” 

Starwood Property Trust (STWD): A Star in the REIT Universe

Starwood Property Trust (STWD) is a giant in the REIT space, with investments in 30 countries and $115 billion in assets under management. The company's globally diverse portfolio helps provide some cushion to mitigate localized market risks. 

STWD is up 13% YTD, almost on pace with the broader S&P 500, to close Friday at $19.17 - just barely below $20 per share.

The stock offers shareholders a substantial dividend yield topping 10%, paid quarterly. This is significantly higher than the average yield of many other REITs. For instance, Realty Income Corporation (O), another sought-after player in the REIT sector, has a dividend yield of only 6%, and has lost 17% of its value YTD. 

STWD also has a solid track record of surpassing analysts' earnings predictions. In their most recent Nov. 8 earnings release, STWD topped bottom-line expectations, despite a miss on revenue. For fiscal 2024, analysts are targeting 4.5% earnings growth.

Analysts are giving STWD a big thumbs-up, with the mean target price of $22.00 suggesting 14.7% potential upside. Out of 6 analysts, there are 5 “strong buys” and only 1 “hold.”