REITs Large Dividends Continue to Benefit From Record Low Interest Rates
15 Mai 2012 - 2:20PM
Marketwired
High yielding mortgage REITs have performed admirably in 2012. The
Vanguard REIT ETF (VNQ) is up more than 12 percent-year-to-date.
REITS have continued to take advantage of low interest rates to
boost earnings and increase dividends for investors. 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 investing opportunities on diversified REITs and provides
equity research on American Capital Agency Corp. (NASDAQ: AGNC) and
ARMOUR Residential REIT, Inc. (NYSE: ARR).
Access to the full company reports can be found at:
www.ParagonReport.com/AGNC
www.ParagonReport.com/ARR
Continuously low interest rates are boosting earnings throughout
the sector. Dividend returns for Mortgage REITs are partially
dependent on interest rate spreads. Higher interest rates make
borrowing less profitable for REITs. Federal Reserve Chairman Ben
Bernanke last month said that the central bank "would not hesitate"
to purchase more bonds to drive borrowing costs lower if the
economy needed it.
The Federal Reserve has kept its benchmark rate near zero since
December 2008, and last month the Fed's policy panel reiterated
that it does not expect rates to rise until late 2014 at the
earliest. It has also bought $2.3 trillion of bonds in two rounds
of so-called quantitative easing.
Paragon Report releases regular market updates on diversified
REITs so investors can stay ahead of the crowd and make the best
investment decisions to maximize their returns. Take a few minutes
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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. The company currently offers investors an annual dividend
of $5.00 per share for a yield of 15.47 percent.
ARMOUR is a Maryland corporation that invests primarily in
hybrid adjustable rate, adjustable rate and fixed rate residential
mortgage backed securities. These securities are issued or
guaranteed by U.S. Government-chartered entities. ARMOUR is
externally managed and advised by ARMOUR Residential Management
LLC. The company currently offers investors an annual dividend of
$1.20 per share for a yield of 17.29 percent.
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The Paragon Report has not been compensated by any of the
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