Stock Analysis & Valuation Cohen & Steers REIT and Preferred Income Fund, Inc. (RNP)

• Previous Close: $20.34
• Sector Valuation Confidence Level: High

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	33.40	64
Intrinsic value (DCF)	15.57	-23
Graham-Dodd Method	6.95	-66
Graham Formula	11.55	-43

Strategic Investment Analysis

Company Overview

Cohen & Steers REIT and Preferred Income Fund, Inc. (NYSE: RNP) is a closed-end balanced mutual fund managed by Cohen & Steers Capital Management, Inc., specializing in real estate investment trusts (REITs) and preferred income securities. Launched in 2003, RNP provides investors with diversified exposure to U.S. public equity and fixed-income markets, focusing on high-quality REITs and preferred securities. The fund employs fundamental analysis to assess creditworthiness, growth potential, and relative value, benchmarking against indices like the FTSE NAREIT Equity Index and S&P 500. With a strong track record in income generation, RNP appeals to investors seeking stable dividends and capital appreciation in the real estate and preferred securities sectors. As part of Cohen & Steers’ broader suite of income-focused investment solutions, RNP benefits from the firm’s deep expertise in real assets and income strategies, positioning it as a compelling option for yield-oriented portfolios.

Investment Summary

RNP offers investors a balanced approach to income generation through its dual focus on REITs and preferred securities, sectors known for stable dividends and inflation hedging. The fund’s 1.29 beta suggests moderate market sensitivity, while its $1.63 annual dividend per share (yielding ~5.5% as of latest data) underscores its income appeal. Strengths include Cohen & Steers’ specialized management and sector diversification, but risks include interest rate sensitivity (given the fixed-income holdings) and REIT market cyclicality. With no leverage (zero debt) and $89K in cash, the fund maintains a conservative balance sheet. Investors should weigh its income consistency against potential volatility in rising-rate environments.

Competitive Analysis

RNP’s competitive edge lies in its hybrid strategy combining REITs and preferred securities—a niche few closed-end funds replicate. Cohen & Steers’ expertise in real assets enhances stock selection, while its focus on high-quality, income-generating securities mitigates credit risk. The fund’s benchmarks (FTSE NAREIT, S&P 500) reflect its balanced mandate, though its 1.29 beta indicates higher volatility than pure fixed-income peers. RNP’s zero-debt structure differentiates it from leveraged CEFs, reducing downside risk but potentially capping returns. Its ~$1B AUM provides scale, though larger multi-sector funds may offer broader diversification. The fund’s reliance on REITs (a cyclical sector) and preferreds (rate-sensitive) could lag in rising-rate environments, but its active management allows tactical shifts. Competitors either specialize in REITs (lacking preferred exposure) or focus solely on fixed income (missing equity upside), making RNP’s dual mandate unique.

Major Competitors

• Cohen & Steers Total Return Realty Fund (RFI): RFI, also managed by Cohen & Steers, focuses exclusively on REITs, lacking RNP’s preferred-income diversification. Its pure-play real estate approach offers higher sector concentration but misses the downside cushion of preferred securities. RFI’s performance is more tightly correlated to REIT market cycles.
• iShares Preferred and Income Securities ETF (PFF): PFF is a passive ETF tracking preferred securities, offering lower fees (0.46% expense ratio vs. RNP’s ~1.3%) but no REIT exposure. While PFF provides broader preferred-market access, it lacks RNP’s active management and equity-driven total-return potential.
• Vanguard Real Estate ETF (VNQ): VNQ is a low-cost (0.12% expense ratio) REIT ETF with massive AUM, appealing to cost-conscious investors. However, it excludes preferred securities and is passively managed, unlike RNP’s active, income-focused strategy. VNQ’s liquidity is superior, but its dividend yield is typically lower.
• Invesco Preferred ETF (PGX): PGX targets preferred securities like RNP’s fixed-income sleeve but lacks REIT exposure. Its 0.50% expense ratio is competitive, though RNP’s hybrid approach may better balance risk/return. PGX’s passive strategy contrasts with RNP’s fundamental credit analysis.
• Cohen & Steers Quality Income Realty Fund (RQI): Another Cohen & Steers fund, RQI emphasizes high-dividend REITs and leveraged strategies (unlike RNP’s zero debt). RQI’s higher yield comes with greater risk, while RNP’s preferred holdings add defensive ballast. Both benefit from the same management team.