Published Tue, 03 Nov 2020 11:00:00 -0500 on Seeking Alpha
Seeking AlphaDividend IdeasLike Preferred Stocks? Cherry Hill And Two Harbors Yield Up To 9%Nov. 3, 2020 11:00 AM ET|| About: Cherry Hill Mortgage Investment Corporation (CHMI), CHMI.PA, TWO, TWO.PD, TWO.PE, Includes: AGNC, AGNCM, AGNCN, AGNCO, AGNCP, CHMI.PB, FRC, FRC.PG, FRC.PH, FRC.PI, FRC.PJ, FRC.PK, NLY, NLY.PD, NLY.PF, NLY.PG, NLY.PI, ORC, TWO.PA, TWO.PB, TWO.PCby: Rida MorwaRida Morwa High Dividend OpportunitiesThe #1 Service for Income Investors and Retirees, 9-10% dividend yield.SummaryMortgage REITs (mREITs) and in particular "agency" mREITs are one of the most undervalued sectors today.
We explain why preferred stocks from "agency" mREITs are a very safe in the current environment. No "agency" mREITs have ever gone bankrupt.
We make the case that "fixed-rate" preferred stocks from Cherry Hill Mortgage and Two Harbors Investments are very undervalued and whose safety is under-appreciated.
We also highlight Cherry Hill Mortgage common stock as being the most undervalued agency mREIT with one-year total return potential of over 30%.
Co-produced with Preferred Stock Trader
About Agency Mortgage REITs
The agency mortgage REITs (agency mREITs) that we are highlighting own fixed-rate residential mortgages that are guaranteed by GSEs (Government Sponsored Enterprises). They generally use their equity, plus money they borrow at short term rates, to purchase higher-yielding residential mortgages or RMBS (Residential Mortgage Backed Securities). They earn their money from the spread difference between the short-term rates at which they borrow and the long-term rates they receive on their mortgages. They also use hedges to protect against moves in interest rates which could be detrimental to their profits or book value.
Why Agency mREIT Preferred Stocks Are So Safe - Especially Now
In the current environment, agency mREITs are as safe as they have ever been, yet yields on their preferred stocks are much... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|ORCHID ISLAND CAPITAL||5.58||0.0||-0.29||0.96||17.75|
|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|
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