Today’s chart highlights my favorite place to find safe seven percent, nine percent, and even 12% yields: mortgage real estate investment trusts (REITs). Mortgage REITs work like a virtual bank. They borrow money from savers and lend out funds to homeowners. Because “Uncle Sam” backs many of these loans, investors prize these businesses for their safe income.
Case in point: Western Asset Mortgage Capital Corp (NYSE:WMC). This lender invests in residential mortgages with guarantees from federal agencies. And with a payout topping 12%, the stock is worth a second look. Western is a sleepy business, for starters. The mortgage represents the last bill that people skip during a financial crisis. In the unlikely event of a default, the company stands first in line to get paid. Furthermore, most of these loans have the backing of Uncle Sam. To encourage lending, federal agencies like Fannie Mae and Freddie Mac have ensured residential mortgages. This meant that even during the height of the 2008 financial crisis, insured mortgage-holders still got paid.
Source: Income Investors
Related Articles:
- Why Dividends Matter
- Hey, You Invest Like a Girl!
- Are Storm Clouds Gathering For These 4 High-Yielding Securities?
- Weekly Links: May 13, 2017
- 5 Dividend Stocks With A Low P/B Ratio
________________________________________________________________
Subscribe to:
Post Comments (Atom)
Popular Posts Last 30 Days
-
There’s nothing more satisfying that getting money for doing nothing. That’s why dividend stocks hold so much appeal for portfolios. Many of...
-
We've broadened our search to the S&P 500, and also found two high-dividend stocks among the dividend yield leaders of that larger i...
-
Dividend stocks can be a great source of passive income. Not only do they deliver cash into your brokerage account on a recurring basis, but...
-
I believe in dividend growth investing and consider holding strong companies will help me going through any stock market storm. I believe di...
-
Generally speaking, the higher the yield, the higher the risk involved. Since yield is a function of share price, a failing business model w...
-
If you are retired, you have likely shifted from building your nest egg to living off your assets. That means you probably gravitate toward ...
-
With bond rates already low and the Fed hinting at rate decreases, dividend stocks are in high demand these days, as alternatives in the fix...
-
Warren Buffett famously quipped that if you aren't willing to own a stock for 10 years, you shouldn't think about owning it for 10 m...
-
What kind of income-generating assets make the most sense? Obviously, those that appear undervalued with respect to the basket/group of stoc...
-
REITs are reporting higher revenue and earnings so far for the quarter. But one of the specific metrics for profitability comes from the rat...
0 comments
Post a Comment
Post a Comment