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Invesco Mortgage Capital Inc. Message Board

  • xraythrives xraythrives May 2, 2013 11:23 AM Flag

    Anyone listen to CC? Wonder why the drop on seemingly good QTR

    I usually wait for the seeking alpha transcript.

    Sentiment: Buy

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Seeking Alpha transcript is available:
      "we expect that our dividend will be somewhat lower as a result of lower available reinvestment yields and our move to diversified funding and reduced rate risk."

      If people think every mREIT needs to maintain 15% dividend, they are seriously mistaken. The longer we continue this low short-term interest rate environment, the more difficult it becomes to generate interest income. IVR is making the decision to lower its dividend and move into safer stuff -- as opposed to increasing its risk for short-term dividends.

      The market is clearly pricing in the cut to 60 cents. Although the credit quality of assets will improve, I'm inclined to think $20.50ish is a fair price here. I sold 1/3 of my position. I'm good with holding 1000 shares, but it's time for me to diversify into some MLPs.

      • 2 Replies to waynesonnen
      • These spreads can't last forever and reduction of dividends in these amreits is a fact of life. What I am looking for is the amreits, particularly the hybrids, that are preparing themselves for the mortgage market of the future. That way they will have a sustainable long range business plan. IVR is doing that. Read the transcript of the call. I don't care if the dividend goes down some. A dividend of 10% in a sustainable company is quite good. The problem I have with amreits that I have owned now for some 3 years is whether they can be held for the long term. Or will conditions require a sale because rates are headed higher in a way that is dangerous for the company and dividend. I do not expect this, but one question any amreit has to ask themselves is how do they intend to operate in the mortgage market of the future. Things are changing.

        I see TWO and IVR taking actions to survive and thrive. Using less repo financing. I am sure others are also.

      • Unfortunately for me, MLP's don't work in tax deferred retirement accounts due to having to file 990-T on any "unrelated business taxable income", or UBTI and is described on form publication 598 from the IRS

16.98-0.13(-0.76%)Jul 31 4:03 PMEDT

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