Recent analysis suggested this company's dividend was in trouble, but I am disputing that thesis. One challenge in evaluating the REIT is the different meanings of "leverage". When this company provides its portfolio updates, the leverage figures exclude its TBA positions. While I'm not saying the company's dividend is rock-solid, I do believe an informed investor could come away from the piece thinking that a dividend cut was a near certainty. While there are quite a few mortgage REITs that are clearly not covering their current dividend, this stock does not fall into that group.
A recent article on ARMOUR Residential REIT (NYSE:ARR) brought out some concern among shareholders and potential investors in the mREIT. Did ARMOUR Residential REIT reduce leverage? The company reduced it dramatically, if we are discussing the GAAP leverage. If the discussion focuses on the total economic leverage, which includes TBA securities, then the decline in leverage would've been much smaller. The leverage ARR is providing is simply dividing repurchase agreements by total equity. At the end of August, the value was $7.77 billion. Dividing that by about $1.2 billion (rounded) in total equity (including preferred shares) gives investors a leverage of 6.5. If you incorporate $2.5 billion in TBA securities, the leverage would move up to about 8.6.
Source: Seeking Alpha
Related Articles:
- The Most Important Thing To Consider When Selecting A Dividend Stock
- 5 Healthcare Stocks With Growing Dividends Yielding In Excess of 2%
- 3 Powerful Concepts for Compounding Wealth with Dividend Stocks
- Why We Are Dividend Growth Investors
- 5 Higher Yielding, Lower Risk Stocks To Perk Up Your Dividend Income
An 11.48% Yield That Is Stronger Than It Looks
Posted by D4L | Wednesday, September 28, 2016 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
In short, dividend-bearing stocks are one of the smartest approaches stock investors have available currently. The same is true in strong ec...
-
If your growth-investing days are over (or nearly so) and you're more interested in steady income, start your search with all-weather st...
-
Even in the current inflationary environment, where stocks across a wide variety of sectors are trading down, companies with a favorable his...
-
Finding cheap dividend stocks is critical for another reason. By the time the Federal Reserve meets for the second time in 2023, the central...
-
Investing in passive income can allow you to make money with minimal portfolio management. There are many types of investments to make passi...
-
Many companies make very predictable fixed dividend payments each quarter. When they do, their investors have a pretty good idea of how much...
-
As 2022 wraps up, many investors are likely looking for ways to position their portfolio for more macroeconomic uncertainty next year. After...
-
Linked here is a detailed quantitative analysis of Chevron Corporation (CVX). Below are some highlights from the above linked analysis: Comp...
-
Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) is crushing the market this year as value and dividend stocks have pulle...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.