Big yield and big upside create an attractive investment. The fixed-rate dividend is out of fashion, but investors previously accepted a yield in the upper 7% range when the 10-year Treasury was over 3.2%. The biggest risk comes from its portfolio. However, the leverage isn't excessive and there is far more common equity than preferred equity. That provides preferred share investors with a shield.
MFA Financial (MFA) has two preferred shares: MFA-B (NYSE:MFA.PB) and MFA-C (MFA.PC). I cover all these shares in my frequent articles on mortgage REITs, but I rarely focus the entire article on one share. That can make it hard for some investors to find the articles if they aren't following me. MFA-B has a fixed-rate dividend, which is clearly out of favor today as rates ripped higher. Beyond higher Treasury rates we're also seeing wider credit spreads. That combination pushes share prices lower and creates a nice bargain.MFA-B has a yield of 10.24%. If we adjust for dividend accrual (as we should for preferred shares), the stripped yield is 10.3%.
Source: Seeking Alpha
Related Articles:
________________________________________________________________
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...
-
Boring stocks to buy and hold almost always align with deeply established businesses. While they won’t offer the outstanding growth potentia...
-
Did you know that if a company were to increase its dividends by 5% per year, it would take 14 years for its payouts to double? And if its r...
-
The quick rise in interest rates over the past year turned investor sentiment toward REITs negative. Higher interest rates make it harder fo...
-
While there are many paths investors can take to generate long-term wealth, our preferred method is to buy-and-hold quality dividend stocks ...
-
Indeed, with recession on the horizon, investors are increasingly emphasizing quality, safety and dividends in their portfolio selections. W...
-
While it is prudent to build a more robustly diversified portfolio than just three stocks, the three discussed in this article are sure to g...
-
Cash is king when you’re looking to add dividend stocks to your portfolio There’s ample reason for caution. In case you haven’t noticed, a l...
-
Linked here is a detailed quantitative analysis of Texas Instruments Inc. (TXN). Below are some highlights from the above linked analysis: C...
-
Countless people dream of being able to pay their bills with the cash they receive from their investments. But it doesn't have to be jus...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.