Investors Drawn to Twenty Percent Yields From American Capital Agency and Invesco Mortgage
12 Oktober 2011 - 2:16PM
Marketwired
High yielding Real Estate Investment Trusts (REITs) have been a
popular investment since the low interest rate environment set in
two years ago. Several REITs earn their money on the spread between
low-interest short-term borrowing and purchasing high-interest
long-term securities, making the present economic climate highly
lucrative for REITs. The Bedford Report examines the outlook for
diversified REITs and provides equity research on American Capital
Agency Corporation (NASDAQ: AGNC) and Invesco Mortage Capital, Inc.
(NYSE: IVR). Access to the full company reports can be found at:
www.bedfordreport.com/AGNC www.bedfordreport.com/IVR
Mortgage REITs typically borrow at low rates and lend in the
mortgage markets at higher rates, usually by buying mortgage-backed
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. Hybrid mREITs,
meanwhile, 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.
Most mREITS (Hybrid or not) earn their money on the spread
between low-interest short-term borrowing and purchasing
high-interest long-term securities. The Federal Reserve has
expressed its intention to keep interest rates low which means that
REITs should enjoy a good spread for the foreseeable future.
The Bedford Report releases stock research on REITs so investors
can stay ahead of the crowd and make the best investment decisions
to maximize their returns. Take a few minutes to register with us
free at www.bedfordreport.com and get exclusive access to our
numerous analyst reports and industry newsletters.
Invesco Mortgage Capital is a hybrid mREIT as a part of its
portfolio is made up of mortgages insured by the federal agencies
Fannie Mae, Freddie Mac and Ginnie Mae. Invesco currently pays a
dividend of $3.20 per share annually for a yield of around 23.3
percent.
American Capital Agency pays an annual dividend of $5.60 per
share for a hefty yield of around 21 percent.
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members. The Bedford Report has not been compensated by any of the
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