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Real Estate Investment Trusts (REITs)

  • Buy mREITs On Impeding Housing Recovery

    By Adnan Khan - March 7, 2013 | Tickers: AGNC, NLY, ARR

    In the wake of the Fed's quantitative easing efforts, several factors are partly impeding the recovery of the US housing market. Yet three mortgage REITs -- American Capital Agency (NASDAQ: AGNC), Armour Residential (NYSE: ARR), and Annaly Capital Management (NYSE: NLY) -- look particularly well-positioned to benefit from this situation.

    Background On Easing
    The U.S. Federal Reserve has been busy doing its best to accelerate the US housing recovery through more »

  • 3 mREITs With Positive Insider Buying

    By Adnan Khan - March 6, 2013 | Tickers: AGNC, NLY, AMTG, CYS, HTS

    In recent months, mortage REITs have looked like an increasingly risky bet for investors. Yet a stock screen has revealed that insiders at the following mortgage REITs are still buying shares:

    • American Capital Agency (NASDAQ: AGNC)
    • Hatteras Financial (NYSE: HTS)
    • Apollo Residential Mortgage (NYSE: AMTG)

    Let's explore the current state of the mortgage REIT market, then examine each of the stocks above to see why insiders might be buying more »

  • The New Investors Playbook: REIT Edition

    By Adem Tahiri - February 28, 2013 | Tickers: CCG, EQR, HCN, RWO

    Take the boom of 2004, mix in the bust of 2007, throw in the Fed hinting at higher mortgage rates, and what do you have? A real estate market that’s downright scary to new investors. But fear not, Fool -- you haven’t missed the rally.

    Introducing: The Real Estate Investors Playbook

    Despite the recent rise for housing related stocks, any "interest rate" driven sell-off in Real Estate is your more »

  • Potential Winners of Quantitative Easing’s Death

    By Adnan Khan - February 25, 2013 | Tickers: AGNC, NLY

    Where the death of Fed’s quantitative easing might be a negative for the US equities in general, it will bring relief to the US Agency mortgage REITs sector. I believe in the event of a halt of the Fed’s easing, Annaly Capital Management (NYSE: NLY) and American Capital Agency (NASDAQ: AGNC) will appear to be the largest winners. The rest of this investment thesis aims to look at more »

  • This 11% Yielder Is Well Positioned to Maintain Its Dividend

    By Adnan Khan - February 22, 2013 | Tickers: AGNC, NLY, CYS, DX, DX-A, TWO

    Dynex Capital (NYSE: DX) is operating as a mortgage REIT since 1988 with an objective of providing higher risk-adjusted returns to its shareholders primarily through dividends.  For this purpose, the company originates and securitizes various types of loans, largely single-family and commercial mortgage loans and manufactured housing loans. Besides, the company invests in Agency and non-Agency mortgage backed securities.  The company’s Agency RMBS consist of hybrid adjustable and ARMs more »

  • Big Relief For Agency mREITs

    By Adnan Khan - February 21, 2013 | Tickers: AGNC, NLY, ARR

    While the Fed remains committed to keep the short-term rates near zero, its intentions of keeping the long-terms rate at their record low seems not to be working as imagined. The Fed has been taming the rates in order to support the US housing and labor markets. Through QE3 and the $45 billion monthly Treasuries acquisition, the Fed intends to provide cheap credit to home borrowers and encourage them to more »

  • Disecting This mREIT

    By Adnan Khan - February 21, 2013 | Tickers: NLY, CXS

    Since 2008, CreXus Investment (NYSE: CXS) has operated as a mortgage REIT with investments in commercial mortgage loans, commercial mortgage backed securities, commercial real property, Agency Residential mortgage backed securities, commercial real estate debt and other commercial real estate related assets. Since the company is operating as a mortgage REIT, its objective is to provide its shareholders with high risk-adjusted returns, primarily through dividends.

    Investment Portfolio

    For the purpose of more »

  • This REIT Presents 12% Total Return

    By Adnan Khan - February 20, 2013 | Tickers: AVB, EQR, UDR

    Equity Residential (NYSE: EQR) came into existence in 1993 with the objective of investing and managing in quality apartment properties in top US growth markets. The company is part of the S&P 500 and has a market cap of $18.7 billion. The stock is trading at 72 times its earnings and yields 5.4%.

    Recent Quarter’s Review

    Equity Residential reported stronger than expected FFO per share (a more »

  • Buy These Undervalued mREITs: Offering Upside & Elevated Dividend Yields

    By Adnan Khan - February 19, 2013 | Tickers: AGNC, NLY, ANH, ARI, CMO

    In this article, I attempt to screen out undervalued high yielding US mortgage REITs for which analysts have a consensus buy recommendation. For this purpose, I examined their daily trading volumes, discount to book values, dividend yields and consensus recommendation of the analysts covering the stock. The specific criteria are as follows:

    • Each of the companies must possess an average daily volume of over 200,000.
    • Each of the companies more »

  • Four Reasons to Buy This 18% Dividend Yielder

    By Adnan Khan - February 18, 2013 | Tickers: AGNC, NLY, ARR, MFA, TWO

    Two Harbors Investment (NYSE: TWO) has operated as a mortgage REIT since 2009 and primarily manages residential mortgage backed securities, residential mortgage loans, residential real properties and other financial assets. The company is externally managed by PRCM Advisors LLC, a wholly-owned subsidiary of Pine River.  

    Business Diversification

    Two Harbors' investment portfolio as of Dec. 31, 2012 is very well diversified, giving the company an edge over American Capital Agency (NASDAQ: AGNCmore »)

  • Your Best Hybrid REIT

    By Adnan Khan - February 18, 2013 | Tickers: MITT, AGNC, MTGE, IVR, MFA

    Agency mortgage REITs are real estate investment trusts that seek to invest in mortgage backed securities for which any of the government Agencies, like Fannie Mae, Freddie Mac and Ginnie Mae, guarantee interest and principal payments. Therefore, Agency paper is considered to have no default risk. In contrast, non-Agency mortgage REITs invest exclusively in non-Agency MBS. Non-Agency securities are considered to offer considerably higher yields compared to Agency securities. Hybrid more »

  • Buy IVR On Diversified MBS Mix

    By Adnan Khan - February 14, 2013 | Tickers: AGNC, NLY, IVR, TWO

    Invesco Mortgage Capital (NYSE: IVR) was formed to operate as a debt REIT that invests in residential and commercial mortgage backed securities besides investing in mortgage loans. The residential mortgage backed securities that Invesco is primarily interested in are MBS for which any of the government sponsored Agencies guarantee the interest and principal payment. The company also has non-Agency MBS in its portfolio, which provide the advantage of diversification to more »

  • Higher Rentals For This REIT

    By Adnan Khan - February 13, 2013 | Tickers: HCP, HCN, VTR

    Organized in 1985, HCP (NYSE: HCP) operates as an equity REIT seeking to own and manage real estate properties in five healthcare segments; senior housing, skilled nursing, life sciences, medical offices, and hospitals. This self-managed company believes in catering to the US healthcare sector and managing investments that are well diversified by geography, operator, tenant, and investment product.

    Recent Quarter’s Performance

    HCP disclosed solid performance for the fourth quarter more »

  • Growth & Yield Drivers Remain in Place for PMT

    By Adnan Khan - February 13, 2013 | Tickers: NSM, NCT, PMT

    PennyMac Mortgage Investment (NYSE: PMT) operates as a specialty finance company that seeks to invest primarily in residential mortgage loans. The company has a market cap $1.52 billion and for the purpose of reporting PennyMac is divided into two: Correspondent Lending and Investment Activities. Under its Correspondent Lending function, PennyMac acquires newly originated loans from mortgage lenders, sells them to an Agency or a third party, or pools them more »

  • Which REIT is Right?

    By Adnan Khan - February 13, 2013 | Tickers: AGNC, CYS, HTS

    Hatteras Financial Corp (NYSE: HTS) started operations in 2007 as a mortgage REIT that seeks to invest in single family mortgage backed securities for which any of the government sponsored Agencies guarantees principal or interest payments. The company invests in both fixed rate and Adjustable rate mortgage backed securities. At the end of the fourth quarter of 2012, the company was managing an investment portfolio of $25.8 billion, compared more »

  • Is a 14% Yield Sustainable for This mREIT?

    By Adnan Khan - February 12, 2013 | Tickers: AGNC, MTGE, CYS

    American Mortgage Capital Investment (NASDAQ: MTGE) started operations as a sister company of American Capital Agency (NASDAQ: AGNC) in 2011. American Mortgage Capital invests and manages a leveraged portfolio of mortgage backed securities. The portfolio includes Agency and non-Agency residential MBS, while some proportion of the portfolio is also invested in commercial mortgage backed securities. Therefore, the company has a diversified mix of MBS in its investment portfolio. In contrast more »

  • Buy This mREIT Despite Headwinds

    By Adnan Khan - February 12, 2013 | Tickers: AGNC, NLY, ARR, NSM, NCT, PMT

    PennyMac Mortgage Investment (NYSE: PMT) operates as a specialty finance company that seeks to invest primarily in residential mortgage loans. The company has a market cap $1.57 billion, and for the purpose of reporting PennyMac is divided into two business segments; Correspondent lending and Investment Activities. Under its Correspondent lending function, PennyMac acquires newly originated loans from mortgage lenders, sell them to an Agency or a third party, or more »

  • Three Reasons to Buy This mREIT

    By Adnan Khan - February 11, 2013 | Tickers: AGNC, NLY, ANH, CYS

    Anworth Mortgage Asset Corporation (NYSE: ANH) started its operations in 1998 as a debt mortgage REIT with an objective of providing its shareholders with elevated returns primarily through dividends. For this purpose, the company seeks to invest primarily in mortgage backed securities for which the principal and interest payments are guaranteed by any of the government Agencies like Fannie Mae or Freddie Mac. Traditionally, the company had concentration in adjustable more »

  • Is the Recent Dip in CYS a Buying Opportunity?

    By Adnan Khan - February 11, 2013 | Tickers: AGNC, NLY, CYS

    CYS Investments (NYSE: CYS) commenced its operations in 2006 as a mortgage REIT that exclusively invests in Agency mortgage backed securities backed by single family residential mortgage loans. The company’s investment strategy includes fixed rate securities, adjustable rate securities and hybrid ARMs. The company finances its investment portfolio by borrowing short-term using repurchase agreements.

    Investment Portfolio

     

    At the end of the fourth quarter of the prior year, CYS Investments more »

  • This Payment Industry Giant Brings Surprises

    By Adnan Khan - February 11, 2013 | Tickers: MA, V

    Visa (NYSE: V) stands to be the largest player in the global payments technology industry with a market cap of over $104 billion. The company seeks to connect consumers, businesses, banks and governments across the globe to fast, reliable and secure electronic payments.

    The company reported better than expected fourth quarter performance. Both the bottom line and top line advanced their respective estimates. While the EPS of $1.82 per more »

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