NEW YORK, NY--(Marketwire - Oct 23, 2012) - Shares of high yielding REITs have experienced a little pull back this month. During the five days through October 15 mortgage real-estate investment trusts have fallen 5.9 percent, which was the largest decline since October of last year. The Paragon Report examines investing opportunities in diversified REITs and provides equity research on American Capital Agency Corp. (
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Mortgage REITs have been successful in the past as the cost to borrow money to buy bonds and securities have been far less than the yields they receive. But there have been some concerns regarding the current spread REITs earn on their purchases. As the Federal Reserve has pledged to keep interest rates near-zero till at least mid-2015, yields of bonds and mortgage backed securities have been pressured lower. The yield on the Barclays U.S. MBS Conventional 30 Year Index has fallen from 2.9 percent, in January, to 2.4 percent. "The spread between yields and funding is abnormally low," says Sean Kelleher, president of Shay Asset Management.
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American Capital has $101 billion in assets under management and seven offices in the U.S. and Europe. The company has declared a cash dividend of $1.25 per share for the third quarter 2012, for a yield of roughly 14.6 percent. American Capital Agency is scheduled to release their third quarter 2012 financial results on October 29, 2012.
Invesco Mortgage Capital is a real estate investment trust that focuses on financing and managing residential and commercial mortgage-backed securities and mortgage loans. The company offers an annual dividend of $2.60 per share for a yield of around 12.5 percent. Shares of Invesco are up nearly 50 percent for the year.
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- Investment & Company Information
- American Capital
- mortgage backed securities