Dividends taxed as normal income- New Century wrote an article for Seeking Alpha and addressed this issue:
"However, as any seasoned mREIT investor knows, mREIT dividends are already taxed at ordinary income rates due to the legal structure of mREITs. So, if Obama's tax increase is approved (or even if a compromise is made), mREIT yields are going to become significantly more attractive compared to the yields of regular companies." This could bring a boatload of investors into the REITs because of the higher yield.
The mREITs trade at approximately 0.88x to Q3 BV. The last two times they were at this level, the stocks in this sector had bullish runs that lasted six months or more. That was in (7/2007) and (12/2005).
Wells Fargo upgraded Annaly Capital Management from Market Perform to Outperform as part of a broader call on the mREIT sector.
Kevin Keyes, President of Annaly Capital Management, just invested $1.4 million in the company buying stock. Top management tends to have the best inside view into the business, so when company officers make major buys, investors are wise to take notice.
It appears that REITs could be set for a comeback. The stock looks bearish but elements in the investment world appear to be signaling that the industry could see another bullish run if all the cards fall in the right places!
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.