Time to break down one of the strong REITs. If you have any questions, feel free to ask. This company predicted a flattening yield curve. Superior hedging techniques will help to sustain the dividend over the next few quarters. The mortgage REIT environment is worsening, but it won’t catch up to it for a while. Less prepayments has resulted in a drop in amortization costs over the past couple of quarters.
CYS Investments (NYSE:CYS), in the past, was given a strong buy rating by me. Based on current prices and the macroeconomic environment, it has become a Sell. The company still has a strong management team. In the past, CYS predicted a flattening yield curve. The mortgage REIT invests exclusively in agency MBS. With the prediction of a flattening yield curve, the company was investing in fixed-rate mortgages with lower coupon rates. Why this strategy? CYS viewed the higher rate securities as a massive risk with a flattening yield curve. As the yield curve flattened, prepayments on loans went up substantially.
Source: Seeking Alpha
Related Articles:
- Managing Risk With Dividend Stocks
- If Only I Had Known About These Dividend Stocks...
- 13 Dividend Stocks and 3 ETFs To Balance Your Asset Allocation
- 4 Communications Services Stocks With Increasing Dividends
- 5 Stocks With Room To Grow Their Dividend
_____________________________________________________________________
Subscribe to:
Post Comments (Atom)
Popular Posts Last 30 Days
-
Do you need more income? Join the crowd. It seems everyone is scouring the landscape these days for decent income investments to beef up the...
-
There are some dividend aristocrats which have not only maintained but increased their dividends for over half a century. Having survived ev...
-
In bull markets, dividends become more or less irrelevant. When the Dow Jones Industrial Average traded above 14,000 in 2007, very few stoc...
-
While I've invested a decent portion of my portfolio into growth stocks, a significant part of my holdings consists of dividend-paying s...
-
All too often when a cheap stock offers a high dividend yield, it's too good to be true. Perhaps the stock has plunged with good reason,...
-
Stocks can make for amazing investments, offering better long-term returns than bonds, precious metals, and most other commonly available in...
-
If it's dividends you're after, there are plenty of top companies to consider, particularly those on the Dow Jones Industrial Averag...
-
Investors hear about dividend aristocrats all the time. It’s a fantastic thing if a company raises its dividend every year for 25 years runn...
-
Anxiety over the European debt crisis and distrust in the markets drove volatility in global stock markets to dizzying heights in 2011. The ...
-
To alert investors of stocks that have the highest risk of reducing their current dividend in the future, Simply Safe Dividends created a Di...
0 comments
Post a Comment
Post a Comment