Published Wed, 16 Sep 2020 08:35:00 -0400 on Seeking Alpha
Seeking AlphaREITsAnnaly: Still The Best 11% Yield To OwnSep. 16, 2020 8:35 AM ET|| About: Annaly Capital Management, Inc. (NLY), Includes: AGNC, ARI, BXMT, CHMI, DX, IVR, LADRX, MFA, MITT, NLY.PD, NLY.PF, NLY.PG, NLY.PI, REM, STWD, TWOby: Rida MorwaRida Morwa High Dividend OpportunitiesThe #1 Service for Income Investors and Retirees, 9-10% dividend yield.SummaryAgency MBS is one of the lowest-risk assets in the world.
mREITs take advantage of having no credit risk and use leverage to improve returns.
Interest rate conditions are currently ideal for agency mREITs.
The Federal Reserve has stated that they intend to maintain these conditions for a long time.
Don't fight the Fed – invest in the same direction they are investing.
Co-produced with Beyond Saving
If you are an income investor, mortgage REITs (mREITs) are consistently among the highest yielding options. Some people pay interest, other people like to collect it. At High Dividend Opportunities" we think it's much better to be one of net interest collectors. However, one of the major risks of owning debt is if the borrower is unable to pay. Debt is only worth what the borrower can eventually pay or the value of any collateral.
Perhaps one of the most intriguing mortgage assets to own today is "agency mortgage-backed securities" (agency MBS). This unique asset removes the risk of the underlying borrowers defaulting on the mortgages.
Banks that originate mortgages are not interested in waiting for decades to get their capital back – they want to originate more mortgages to new customers. So when an individual gets a mortgage, as long as the loan qualifies, the loan is quickly sold to "Government Sponsored Enterprises" (or GSEs) Fannie Mae or Freddie Mac. Those agencies then repackage the mortgages into MBS and sell them to investors who are willing to sit back and collect the interest payments – hence the term "agency MBS." In order to ensure investor demand, the GSEs include a... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|CHERRY HILL MORTGAGE INVESTMENT||13.52||0.0||-3.91||1.60||14.40|
|AMERICAN CAPITAL AGENCY||15.64||0.0||-1.54||1.92||12.21|
|TWO HARBORS INVESTMENT||13.28||0.0||-2.81||1.60||12.02|
|INVESCO MORTGAGE CAPITAL||15.18||0.0||-1.01||1.80||11.80|
|AG MORTGAGE INVESTMENT TRUST||17.47||6.1||2.87||1.90||10.89|
|APOLLO COMMERCIAL REAL ESTATE FINANCE||19.35||12.6||1.54||1.84||9.57|
|STARWOOD PROPERTY TRUST||24.39||18.5||1.32||1.92||7.95|
|BLACKSTONE MORTGAGE TRUST||36.16||14.5||2.49||2.48||6.94|
|ISHARES FTSE NAREIT MORTG PLUS CAPPED INDEX FUND||41.97||0.0||0.00||0.00||0.00|
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