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
-
If you're worried about inflation rearing its ugly head next year, you should probably worry about more likely catastrophes, such as bei...
-
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...
-
When a company pays a dividend, it's a good thing for shareholders. When a company consistently pays a dividend every quarter, it's ...
-
We screened our 24/7 Wall St. dividend equity research database and found 5 stocks that combined can generate over $3,000 of annual passive ...
-
The stock market has been on an upward path of late, with some of the most prominent stocks hitting astronomical highs. The dividend yield o...
-
Dividend growth stocks can be incredibly attractive investments if you crave recurring income. As these types of stocks raise their dividend...
-
My top financial goal is to eventually become financially independent. The foundation of my strategy is to make investments that produce an ...
-
In my opinion, there are three criteria investors should consider when evaluating a particular stock for their portfolio. The first is histo...
-
In this article, we discuss 5 best March dividend stocks to buy. If you want to read our detailed analysis of dividend capture strategy and ...
-
As the broader stock rally broadens to some of the more “boring” corners of the market, it’s the higher-yielding dividend plays that could s...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.