NEW YORK, NY--(Marketwire -02/16/12)- Despite dividend cuts from some of the industry's heavyweights, shares of high yielding Mortgage REITs have performed well this earnings season. The Market Vector Mortgage REIT Income ETF (MORT) is up more than five percent over the last month -- handedly outperforming the Dow Jones Industrial Average. The Paragon Report examines the outlook for diversified REITs and provides equity research on American Capital Agency Corporation (NASDAQ: AGNC - News) and CYS Investments, Inc. (NYSE: CYS - News). Access to the full company reports can be found at:
Analyst Bill Carcache of Nomura Securities issued a report stating that mortgage REITs delivered solid risk-adjusted returns during the quarter ended December 31, 2011 despite continued flattening of the yield curve. "As expected, spreads contracted and dividends were cut. Prepayment speeds generally increased, and they remain a concern in the current environment. Book value growth was flat to negative for most companies and economic returns were generally lower relative to the first three quarters of 2011," Carache explains.
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American Capital Agency Corp. (AGNC) is a real estate investment trust (REIT), which invests in residential mortgage pass-through securities and collateralized mortgage obligations on a leveraged basis. The company reported earnings of $208.7 million or $0.99 per share during fourth quarter 2011, compared with $138.1 million or $2.50 in the year-earlier quarter. The company presently pays an annual dividend of five dollars per share for a yield of around 16.6 percent.
CYS Investments pays an annual dividend of two dollars per share for a yield of around 15 percent. CYS reported net income of $44.1 million during the fourth quarter of 2011, or $0.53 per diluted share, compared to net income of $96.3 million, or $1.16 per diluted share, in the third quarter of 2011.
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