American Capital Agency and Chimera -- Impressive Dividends but Still Highly Scrutinized
23 Novembre 2011 - 2:16PM
Marketwired
Shares of high yielding Real Estate Investment Trusts (REITs) have
been volatile in recent months. While the favorable interest rate
spreads have benefitted the sector, mortgage REITs -- like the rest
of Wall Street -- have been challenged by investor anxiety over the
European debt crisis. Moreover, potential measures being proposed
by Congress and the Obama Administration could potentially weigh on
the industry's profits -- and dividends. The Paragon Report
examines the outlook for diversified REITs and provides equity
research on American Capital Agency Corporation (NASDAQ: AGNC) and
Chimera Investment Corporation (NYSE: CIM). Access to the full
company reports can be found at:
www.paragonreport.com/AGNC
www.paragonreport.com/CIM
The Obama administration's latest plan to help underwater
homeowners refinance turned some investors away from mortgage
REITs. Mortgage prepayments are known to crimp mortgage REIT
earnings. Mortgage REITs make money on the spread between interest
rates on short-term debt that they use to buy higher-yielding,
long-term mortgage securities. By purchasing bonds guaranteed by
the government, analysts argue these companies take on no risk of
default, with the principle concern being an interest rate
risk.
The Paragon Report provide investors with an excellent first
step in their due diligence by providing daily trading ideas, and
consolidating the public information available on them. For more
investment research on diversified REITs register with us free at
www.paragonreport.com and get exclusive access to our numerous
stock reports and industry newsletters.
According to a recent article from Forbes, Agency mREITs as a
group outperformed the S&P 500 in the third quarter. A set of
the 7 most actively traded Agency REITs lost just over 6 percent
(including dividends) compared to a 14 percent loss for the S&P
500. Net Interest Margins for the sector were under pressure in the
most recent quarter as longer-term investment rates fell following
implementation of Operation Twist, which led to a modest downturn
for some dividends in the sector. Operation Twist was aimed at
reducing the cost of borrowing for businesses and consumers,
including the cost of mortgage loans, by lowering long term
interest rates.
For nine consecutive quarters American Capital Agency has paid a
dividend of $1.40 per share. American Capital Agency reported
earnings of $1.39 per share during third quarter 2011, compared to
$1.69 in the year-earlier quarter.
Chimera Investment Corporation is considered a "Hybrid mREIT."
Hybrid mREITs are moderately riskier as they own mortgage backed
securities (MBS) or any debt obligations which do not have an
implicit guarantee of the US Federal Government. Last week the
company said profit slid 43 percent in the third quarter as the
company's income from investments declined, offsetting gains in net
interest income. Chimera pays an annual dividend of 52 cents for a
yield of around 19.4 percent.
The Paragon Report has not been compensated by any of the
above-mentioned publicly traded companies. Paragon Report is
compensated by other third party organizations for advertising
services. We act as an independent research portal and are aware
that all investment entails inherent risks. Please view the full
disclaimer at http://www.paragonreport.com/disclaimer
Add to Digg Bookmark with del.icio.us Add to Newsvine
AGNC Investment (NASDAQ:AGNC)
Graphique Historique de l'Action
De Juin 2024 à Juil 2024
AGNC Investment (NASDAQ:AGNC)
Graphique Historique de l'Action
De Juil 2023 à Juil 2024