NEW YORK, NY--(Marketwire -05/16/12)- 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 Two Harbors Investment Corp. (TWO) and Hatteras Financial Corp. (HTS).
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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 to register with us free at www.ParagonReport.com and get exclusive access to our numerous stock reports and industry newsletters.
Two Harbors operates as a real estate investment trust. The Company is focused on investing in, financing and managing residential mortgage-backed securities (RMBS), residential mortgage loans, residential real properties, and other financial assets. The company currently offers investors an annual dividend of $1.60 per share for a yield of 15.41 percent.
Hatteras Financial is a real estate investment trust formed in 2007 to invest in single-family residential mortgage pass-through securities guaranteed or issued by U.S. Government agencies or U.S. Government-sponsored entities, such as Fannie Mae, Freddie Mac or Ginnie Mae. The company currently offers investors an annual dividend of $3.60 per share for a yield of 12.38 percent.
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