Dividend-News

Daily dividend news for investors in dividend stocks


REM And REML: Unloved Sector With Big Yields Up To 17.6%

Published Wed, 23 Oct 2019 08:35:00 -0400 on Seeking Alpha

Co-produced with Trapping Value and PendragonY
Introduction
Mortgage REITs have given investors a hard time of late. The sector has been rife with dividend cuts and dwindling book values. Investors have been fleeing the sector in droves and the revulsion is palpable. But that stampede has also created a nice opportunity. We look today at two large-payout mortgage REIT ETFs and explain why investors should be looking to add these here. Income investors have a great opportunity!
Business Model & Recent Struggles
Mortgage REITs help provide essential liquidity for the real estate market by investing in residential and commercial mortgages, as well as residential mortgage-backed securities or RMBS and commercial mortgage-backed securities or CMBS. While traditional equity REITs (aka property REITs or eREITs) invest in actual real estate, mortgage REITs provide the backbone financing directly or indirectly to those investments. The business model can be summed in two phrases. Borrow Short. Lend Long.
That means that mortgage REITs borrow at the short end of the curve via floating rates tied to LIBOR or similar benchmarks and lend at the long end of the curve. That has not worked out very well for them recently as the yield curve has flattened.

In that aspect Mortgage REITs sensitivity to the yield curve steepness or "spread" is very similar to that of banks and other financial institutions. We have seen all the big banks complain about falling net... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
ANNALY CAPITAL MANAGEMENT 8.60   0.0 -3.32 1.20 14.00
AMERICAN CAPITAL AGENCY 15.64   0.0 -1.54 1.92 12.21

ANNALY CAPITAL MANAGEMENT - NLY
ANNALY CAPITAL MANAGEMENT - NLY  


Older articles featuring Annaly Capital Management (NLY):
10 High-Dividend Stocks Paying Up to 15%
Fat Dividend Yields Or Big Growth From REITs In 2020
AGNC: Another 11% Yield That Could Double In A Recession
Can We Beat The Market With Less Risk Using Dividend Stocks?
AGNC Investment's Q4 2019 Income Statement And Earnings Projection - Part 2 (Includes Dividend Sustainability Metric)
10% Yield: Why I 'Sleep Well At Night' With A 100% High-Yield Portfolio - Part 2
10% Yield; Why I 'Sleep Well At Night' With A 100% High Yield Portfolio
A 7.5% Yield Preferred, Strong Buy, Better Investment Than Its 10% Yield Common Share: CIM
Detailed Assessment Of AGNC Investment's Results For Q3 2019 (Includes November 2019-January 2020 Dividend Projection)
50 Top U.S. REITs By Gains And Yield Per October 4 Broker Targets

More