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Real Estate Investment Trusts (REITs)

  • Is American Capital Agency Still Better Than Annaly Capital?

    By Adnan Khan - February 9, 2013 | Tickers: AGNC, NLY

    American Capital Agency (NASDAQ: AGNC) commenced operations in 2008 as a mortgage real estate investment trust (REIT) with an objective of providing its investors with elevated returns primarily through higher dividends. For this purpose, the company invests in long-term term residential mortgage-backed securities for which principal and interest payments are guaranteed by any government Agency. The company finances its investments in residential MBS using short term borrowings (repurchase agreements) and more »

  • An 18% Yield Makes This Hybrid mREIT the Best Buy

    By Adnan Khan - February 7, 2013 | Tickers: MITT, MTGE, MFA, TWO

    Two Harbors Investment (NYSE: TWO) commenced operations in 2009 and seeks to invest in residential mortgage-backed securities, residential loans, residential real properties and other financial assets. The company’s target portfolio includes Agency RMBS and Non-Agency RMBS, therefore TWO is classified as a hybrid mortgage REIT. The stock is currently offering an elevated dividend yield of 17.7% and is trading at 38% premium to its book value.

    4Q Performance more »

  • What To Expect From Your mREIT When It Reports 4Q

    By Adnan Khan - February 7, 2013 | Tickers: MITT, AGNC, NLY, ARR, IVR

    Invesco Mortgage Capital (NYSE: IVR) operates as a well diversified mortgage REIT with a market cap of around $2.5 billion. The company invests in both residential and commercial mortgage backed securities to provide higher risk adjusted returns to its investors through both dividends and capital appreciation.  The MBS portfolio that the company is invested in is financed by short-term borrowings (repurchase agreements). The company has a large concentration in more »

  • Your 16% Monthly Yielding Portfolio

    By Adnan Khan - February 7, 2013 | Tickers: ARR, IRC, WSR

    As the title suggests, I have constructed a double digit (16 percent) yielding portfolio of both debt and equity REITs. The stocks selected for this purpose are Armour Residential REIT (NYSE: ARR), Inland Real Estate Corporation (NYSE: IRC), and Whitestone REIT (NYSE: WSR). The reason for selecting these stocks is that they pay dividends on a monthly basis. Since bills and expenses incur on a monthly basis, investors seeking monthly more »

  • Despite No Surprises Is Annaly Still a Buy?

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

    Annaly Capital Management (NYSE: NLY) commenced operations in 1997 as a mortgage REIT with the objective of providing its shareholders elevated returns primarily through dividends. The company is self-managed and seeks to invest at least 75% of its total assets in high quality mortgage-backed securities and short term investments. The company’s charter allows the management to invest the remaining 25% of assets in unrated or less than high quality more »

  • Buy This REIT Despite Near Term Headaches

    By Adnan Khan - February 6, 2013 | Tickers: AVB, EQR, UDR

    AvalonBay Communities (NYSE: AVB) operates as an equity real estate investment trust that develops and manages multi-family communities in the high barrier-to-entry markets in the US. The company has a large concentration in New England, New York, New Jersey, Washington DC and the Midwestern regions. These are the regions with limited new supply of apartment homes, and lower housing affordability in these markets will result in higher growth in cash more »

  • Healthy Trends For Retail REITs

    By Adnan Khan - February 6, 2013 | Tickers: GGP, O, SPG

    Simon Property Group (NYSE: SPG), a self-managed equity REIT with a market cap of $50 billion, reported its fourth quarter 2012 results the other day. The results were better than expected as far as the Funds from Operations and revenues were concerned. The company posted an EPS of $1.01 per common share on revenues of $1.34 billion. The top line beat its estimate by $50 million, while FFO more »

  • Is This REIT Still a Buy ?

    By Adnan Khan - February 5, 2013 | Tickers: AVB, EQR, UDR

    UDR (NYSE: UDR) operates as a self administered real estate investment trust with a market cap of $5.8 billion and invests in multifamily apartment communities located in high barrier-to-entry markets throughout the United States. The company has an increasing presence in the Northeastern regions of the US. For the purpose of reporting the company is divided into segments; Same Communities and Non-Mature Communities. Properties within the Same Communities need more »

  • This mREIT Disappoints Analysts

    By Adnan Khan - February 4, 2013 | Tickers: NLY, CMO, CYS

    Capstead Mortgage (NYSE: CMO) disappointed analysts in general when it reported its results for the fourth quarter of the prior year. The bottom line of $0.31 per common share was $0.02, or 6.1% behind the mean expectation of $0.33 per common share.  This is compared to $0.35 of EPS at the end of the linked quarter. The company paid a $0.30 dividend for the more »

  • Can This mREIT Out Maneuver The Fed?

    By Waqar Saif - February 1, 2013 | Tickers: AGNC, NLY, ARR, CXS

    In its bid to out-maneuver the Fed’s policy of keeping the rates low, Annaly Capital Management (NYSE: NLY) disclosed its interest in purchasing the remaining stocks of CreXus Investments (NYSE: CXS). CreXus Investments specializes in the acquisition and management of commercial mortgage backed securities. Annaly Capital currently holds around 12.4% of CreXus and the full acquisition would provide risk-adjusted returns to shareholders, while at the same time act more »

  • mREITs: Bears Don’t Get It

    By Adnan Khan - January 31, 2013 | Tickers: AGNC, NLY, ARR, CXS

    Mortgage Market Update

    Mortgage rates in the US have been climbing since the beginning of the year. This is despite record easing from the Fed to keep long term rates down. The average 30-year mortgage rate edged up 3.53%, it’s the highest since September, while the average 15-year rate increased 10 basis points to 2.81%. Mortgage rates are on the rise as housing inventories are shirking driving more »

  • All Is Well For Annaly Capital

    By Mohsin Saeed - January 31, 2013 | Tickers: NLY, CXS

    Annaly Capital (NYSE: NLY) finally announces agreement to acquire CreXus Investments (NYSE: CXS) amid increasing long-term mortgage rates. Under the agreement, Annaly agreed to hike the November bid price of $12.5 for each share of CreXus to $13 a share. This way Annaly would pay $872 million for the remaining shares of the commercial mortgage REIT. I believe this diversification is a strategic step in the right direction under more »

  • Have Income Investors Returned To Agency mREITs?

    By Mohsin Saeed - January 31, 2013 | Tickers: AGNC, NLY, ARR, CYS, HTS

    Back in December last year, Agency mortgage REITs were trading on deep discounts to their book values Since the beginning of the year 2013, Agency mortgage REITs have appreciated in price greater than the year to date performance of S&P (the broad market). However, most are still trading at discounts to their book values yielding attractive double digit dividends under the ultra low interest rate environment.  

    Year To Date more »

  • Why mREITs Will Fly High In 1Q13

    By Waqar Saif - January 30, 2013 | Tickers: AGNC, NLY, ARR

    Editor's Note: The initial version stated Annaly and American Capital reported earnings, that is incorrect. Motley Fool apologizes for the error. This version has been corrected.

    The US mortgage rates continue to climb higher and higher since the beginning of the year 2013, increasing borrowing cost for potential home owners despite Fed’s commitment to keep home loans affordable.  Home prices are increasing across the US as improving employment more »

  • This mREIT Gets Even Better

    By Adnan Khan - January 28, 2013 | Tickers: AGNC, NLY, ARR, CXS, PMT, STWD

    Starwood Property Trust (NYSE: STWD) operates as one of the largest commercial mortgage REITs, both buying existing commercial mortgages and originating its own commercial loans. It’s been over three years since the company commenced operations, and since then Starwood has carved out a dominant position in the REITs sector for itself, providing attractive dividend yields and potential for growth. The $3.4 billion market cap company was initially built more »

  • US REITs: The Next Corporate Bonds

    By Adnan Khan - January 28, 2013 | Tickers: ARE, BXP, ESS, PLD, SPG

    Under the prevailing ultra-low interest rate environment, where the 10-year Treasuries are offering only 1.88%, US REITs are the next best alternative to corporate bonds providing regular income. Therefore, investors looking for attractive risk-adjusted total returns should consider income-producing real estate investment trusts as part of their regular income portfolios. Barclays recommends half a dozen REITs it considers income investors should check out this year. The current dividend spread more »

  • Fed Alert: Is More Stimulus on its Way?

    By Adnan Khan - January 27, 2013 | Tickers: AGNC, NLY, ARR

    The Fed Chairman along with his fellow policymakers are scheduled to meet next week for two days to consider going ahead with their unprecedented easing or not. The debate on when to end bond purchases began in December last year, however, the US labor market has yet to show significant gains Fed wants to see before halting bond purchases. While unemployment hovered around 7.8% since the beginning of 2009 more »

  • Don’t Miss This Exciting 10% Yielding mREIT

    By Adnan Khan - January 27, 2013 | Tickers: AGNC, NLY, HTS

    Company Description

    Hatteras Financial (NYSE: HTS), like its fellows Annaly Capital Management (NYSE: NLY) and American Capital Agency (NASDAQ: AGNC) is a pure play Agency mortgage REIT. The company, with a market cap of $2.7 billion, owns assets with short durations and predictable prepayment characteristics. Company policy dictates the management to distribute 100% of its taxable income.

    Asset Portfolio
    Hatteras has both fixed rate and adjustable rate Agency securities more »

  • Three Reasons To Buy This 16% Yielder

    By Adnan Khan - January 23, 2013 | Tickers: AGNC, NLY, ARR, NYMT, PMT

    Formed in 2003, New York Mortgage Trust (NASDAQ: NYMT) operates as a debt REIT which seeks to invest in traditional types of mortgage related investments, such as Agency ARMs and Agency IOs. The company primarily aims to invest in distressed markets like PennyMac Mortgage (NYSE: PMT). However, later on non-Agency residential mortgage backed securities; Agency RMBS consisting of ARM and hybrid adjustable-rate RMBS, multi-family CMBS and distressed residential single family more »

  • It Is Too Early to Abandon This Hot Sector

    By Justin Carley - January 22, 2013 | Tickers: AVB, EQR, PSA

    The MSCI U.S. REIT Index finished 2012 with an 18% gain- marking the fourth straight year of outperformance relative to the S&P 500 Index.  Did you also know that this industry has outperformed in 10 of the last 12 years?  The favorable appeal of investing in real assets with consistent dividends has fueled strong demand for REIT equities.  Will outperformance continue in 2013?  Or will the excessive valuations prove to be too great of a headwind?  This article will highlight some bullish as well as bearish scenarios that investors in REITs should consider as the year unfolds.