New York Mortgage Trust (NYMT) Slips on 25% Dividend Cut
Shares of New York Mortgage Trust, Inc. NYMT have slipped 2.6% after the company announced a reduction in its quarterly dividend payments. Specifically, its board of directors declared a quarterly cash dividend of 30 cents per share for second-quarter 2023.
The dividend will be paid out on Jul 26, 2023, to stockholders of record as of the close of business on Jun 16, 2023. The second-quarter dividend indicates a decline of 25% from the previously announced dividend of 40 cents.
In first-quarter 2023, management indicated keeping dry powder for investment opportunities in the ABS/MBS markets amid a weak macro backdrop. Given the economic recession risk, NYMT reduced its pipeline and anticipated to continue allowing the short-duration BPL bridge position to runoff and help generate liquidity.
While NYMT’s strategy to enhance liquidity by adopting a conservative investment stance may impede net interest income and earnings growth in the near term, focusing on capital preservation seems prudent amid decelerating macroeconomic fundamentals.
The company continues to return capital via share buybacks. In March, New York Mortgage Trust increased the authorization of its previously announced common stock repurchase program by $200 million.
In first-quarter 2023, NYMT repurchased 377,508 shares for $3.6 million. As of Mar 31, 2023, $199.8 million remained available for the repurchase through Mar 31, 2024. Thus, the company’s efforts to enhance shareholder value through efficient capital deployments are encouraging.
In the past six months, shares of NYMT have plunged 13.1% compared with a 10.7% decline in the industry.
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NYMT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
While solid dividend payouts remain the biggest attraction for income investors, numerous other companies have revised their dividend policy to navigate the ongoing turmoil in the financial markets.
Early last month, PacWest Bancorp PACW, which was at the center of the current banking crisis, slashed its quarterly dividend to 1 cent per share from 25 cents.
Commenting on the decision to cut its dividend,PacWest’s CEO Paul Taylor said, “Given current economic uncertainty, recent volatility in the banking sector and potential changes in regulatory capital requirements, we view reducing the dividend as a prudent step to accelerate our plans to build capital to CET1 of 10%+.”
In March, Annaly Capital Management, Inc.’s NLY board of directors declared its first-quarter 2023 common stock cash dividend of 65 cents per share. The announced dividend indicates a 26% decline from the prior dividend of 88 cents.
On its fourth-quarter 2022 earnings call, NLY’s management indicated its intention to reduce quarterly dividends in first-quarter 2023 to a level closer to the company’s historical yield on book value of 11-12% compared to its previous 16% yield on book value. Management believes that this dividend level is sustainable and is in line with the current return potential of NLY’s portfolio.
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New York Mortgage Trust, Inc. (NYMT) : Free Stock Analysis Report
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