Mortgage REIT Dividends Look Risk Free This Summer
June 30 2011 - 8:16AM
Marketwired
Mortgage Real Estate Investment Trusts (mREITs) have garnered
significant attention this month as favorable interest rate spreads
allowed several companies in the sector to hike their quarterly
dividends. The Bedford Report examines the outlook for diversified
REITs and provides equity research on American Capital Agency
Corporation (NASDAQ: AGNC) and Annaly Capital Management, Inc.
(NYSE: NLY). Access to the full company reports can be found at:
www.bedfordreport.com/AGNC
www.bedfordreport.com/NLY
Agency Mortgage REITs such as American Capital Agency and Annaly
have portfolios made up principally of mortgages insured by the
federal agencies Fannie Mae, Freddie Mac and Ginnie Mae. They
typically borrow at low rates and lend in the mortgage markets at
higher rates, usually by buying mortgage-backed securities. By
purchasing bonds guaranteed by the government, analysts argue these
companies take on no risk of default, with the principle concern
being an interest rate risk. On the upside, recent remarks from
Federal Reserve Chairman Ben Bernanke have led most analysts to
conclude interest rates will remain low for the foreseeable
future.
The Bedford Report releases stock research on REITs so investors
can stay ahead of the crowd and make the best investment decisions
to maximize their returns. Take a few minutes to register with us
free at www.bedfordreport.com and get exclusive access to our
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REITs are typically not taxed on their income but are required
to pay out 90 percent of their taxable income in dividends. Last
week Annaly Capital declared a second quarter 2011 common stock
cash dividend of $0.65 per share -- up from $0.62 per share in the
earlier quarter.
American Capital Agency recently declared second quarter 2011
dividend of $1.40 per share. The company also priced a public
offering of 43,200,000 shares of common stock for total estimated
gross proceeds of approximately $1.2 billion. AGNC expects to use
the net proceeds from this offering to acquire additional agency
securities as market conditions warrant and for general corporate
purposes.
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