There's nothing greater than a company that pays you cold hard cash. A strong dividend is the way into this investor's heart, and if you're like me, you'll love mortgage real estate investment trusts, or mREITs. REITs were created in 1960 to give the everyday investor an opportunity to invest in real estate. To qualify as a REIT, 75% of the company's assets must consist of real estate investments, and the company must distribute 90% of its earnings to shareholders. By doing so, REITs are generally not subject to federal or state corporate taxes.
Because of this, many of today's mREITs like Annaly Capital Management (NYSE: NLY) and American Capital Agency (NASDAQ: AGNC) have dividend yields -- or annual dividends per share divided by stock price -- north of 10%. This obliterates nearly every other industry. After making mortgage loans, banks have the opportunity to sell the rights on the loan to an entity. These entities gather tons of mortgages, package them into pools called securities, and sell them into the open market.
Source: Motley Fool
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