Large Dividends From American Capital Agency and CYS Investments Benefit From Record Low Interest Rates
20 Mars 2012 - 1:20PM
Marketwired
High yielding mortgage REITs have performed well this year.
Continuously low interest rates are boosting earnings throughout
the sector and therefore are helping to boost dividends. REITs
trade like stocks, but by law, they must pay out 90 percent of
their taxable income to shareholders as dividends. The Paragon
Report examines the outlook for diversified REITs and provides
equity research on American Capital Agency Corporation (NASDAQ:
AGNC) and CYS Investments, Inc. (NYSE: CYS). Access to the full
company reports can be found at:
www.paragonreport.com/AGNC
www.paragonreport.com/CYS
Dividend returns for Mortgage REITs are partially dependent on
interest rate spreads. Higher interest rates make borrowing more
expensive for REITs. In late February Fed Chairman Ben Bernanke
said the Federal Reserve is sticking with its plan to hold interest
rates at record-low levels until at least late 2014, despite a
pickup in hiring that's steadily lowered the unemployment rate.
The Federal Reserve has kept its benchmark rate near zero since
December 2008, and in January extended a previous pledge to keep
rates low through mid-2013. It has also bought $2.3 trillion of
bonds in two rounds of so-called quantitative easing.
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.
American Capital Agency Corp. operates as a real estate
investment trust (REIT). It invests in residential mortgage
pass-through securities and collateralized mortgage obligations for
which the principal and interest payments are guaranteed by
government-sponsored entities or by the United States government
agency. Presently the company pays an annual dividend of five
dollars per share for a yield of around 17 percent. Earlier this
month the company priced a public offering of 62,000,000 shares of
common stock for total estimated gross proceeds of approximately
$1.8 billion.
Earlier this month the board of directors of CYS Investments
declared a quarterly dividend of $0.50 per share of common stock
for the first quarter of 2012. The dividend will be paid on April
18, 2012 to stockholders of record on March 23, 2012.
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