2 Undervalued Bank Stocks and REITs Worth Buying in 2026

When investors hunt for “undervalued” bank and real estate investment trust (REIT) stocks, the trick sits in separating a real bargain from a value trap. You want a business that can keep earning through a softer economy, not just a cheap-looking chart. Then line it all up with 2026’s big lever: interest rates. Lower rates can help both groups, but each name responds in its own way. So let’s look at some undervalued dividend stocks that could be worth the buy.

Banks

The Canadian Imperial Bank of Commerce (TSX:CM) sits in a sweet spot for 2026 as it can still grow even if Canada’s economy just muddles along. It runs Canadian personal banking, commercial banking and wealth, a U.S. commercial arm, and capital markets. In its fiscal Q4 2025, it grew revenue to $7.6 billion and delivered adjusted net income of $2.2 billion, or $2.21 in adjusted diluted earnings per share (EPS) with a CET1 ratio at 13.3%.

CIBC also gave income investors a very direct signal heading into 2026. It raised its quarterly dividend to $1.07 from $0.97. Meanwhile, it trades at 15 times earnings with a solid 3.3% dividend yield at writing. All together, it’s quite reasonable for a dividend stock.

EQB (TSX:EQB) gives you a different kind of bank bet for 2026. It plays the challenger role through EQ Bank, plus it runs a sizeable alternative lending platform. Recent news also gave it a fresh growth angle: it announced an acquisition of PC Financial and a strategic partnership with Loblaw.

In Q4 fiscal 2025, EQB reported adjusted revenue of $308.1 million, adjusted net income of $63.5 million, and adjusted diluted EPS of $1.53. It also reported a CET1 ratio of 13.3% and a book value per share of $81.31. Today, it trades at about 16.5 times earnings, with a 2% yield. The risk stays real, though. EQB has more sensitivity to housing and funding conditions than the biggest banks, so 2026 could still swing its results around.

REITs

CT REIT (TSX:CRT.UN) brings a calmer vibe for REIT investors who want stability more than drama. It owns Canadian retail properties and it leans heavily on Canadian Tire as its anchor tenant. In Q3 2025, it delivered adjusted funds from operations (AFFO) of $75.4 million and AFFO per diluted unit of $0.317, while distributions paid in the quarter hit $0.237 per unit. It also reported a committed occupancy rate of 99.4%.

Valuation and yield help explain why CT REIT can feel overlooked. The dividend stock offers a dividend yield currently at 5.7%, while trading at just 10 times earnings. The big risk sits in the obvious place: tenant concentration. If Canadian Tire ever hits a rough patch, CT REIT would feel it fast, so you buy it for reliability, not unlimited upside.

Then there’s RioCan REIT (TSX:REI.UN), which offers more upside torque if rate cuts show up, as the market tends to re-rate bigger retail REITs when financing costs ease. It also leaned into operational execution in 2025. In Q3 2025, it posted diluted FFO per unit of $0.46, grew commercial same-property net operating income (NOI) by 4.6%, and held retail occupancy at 98.4%. It also reported an FFO payout ratio of 61% and pointed to $1.1 billion of liquidity, which supports flexibility. It guided for 2025 FFO per unit of $1.85 to $1.88, and that gives investors a clean yardstick for 2026 expectations.

Income investors also get paid to wait. The dividend stock trades at 88 times earnings, true, but offers a 5.9% yield. The risks still matter. Higher-for-longer rates would keep pressure on the whole REIT group, and any slowdown in tenant demand would hit sentiment quickly, even if the properties keep performing.

Bottom line

Put it together and you get a tidy 2026 “undervaluation” case with different flavours. In fact, here’s what $5,000 in each dividend stock can bring in.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTCM$129.2138$4.28$162.64Quarterly$4,909.98EQB$111.6944$2.16$95.04Quarterly$4,914.36CRT.UN$16.41304$0.95$288.80Monthly$4,988.64REI.UN$19.42257$1.16$298.12Monthly$4,990.94

If 2026 brings even modest rate relief, these four can look a lot less “undervalued” in a hurry.

The post 2 Undervalued Bank Stocks and REITs Worth Buying in 2026 appeared first on The Motley Fool Canada.

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More reading

• 5 Stocks for Canadian Dividend Investors
• Goodbye, GICs: These Dividend Stocks Are a Far Better Buy
• RioCan vs SmartCentres: The Better REIT for Right Now
• 2 Dividend Stocks That Pay You Real Cash Every 30 Days
• 3 Reasons to Buy CIBC Stock Like There’s No Tomorrow

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends EQB. The Motley Fool has a disclosure policy.