Technical Research on American Capital and Armour Residential: Agency Mortgage REITs Offer Good Returns

Technical Research on American Capital and Armour Residential: Agency Mortgage
                           REITs Offer Good Returns

PR Newswire

LONDON, February 12, 2013

LONDON, February 12, 2013 /PRNewswire/ --

Investment in REITs is an excellent way to draw an income portfolio. REITs are
legally obligated to distribute 90 percent of their taxable earnings to their
unit holders. While REITs specializing in Mortgage Backed Securities are
performing well, they also face stiff competition from the FED's initiative to
buy MBSs. Agency Mortgage REITs use leverage to increase their return.
However, it also increases their risk profile. The REIT class is also set to
suffer due to high prepayment rates. Despite these weaknesses, American
Capital Agency Corp. (NASDAQ: AGNC) reported good quarterly results and showed
encouraging growth on both Y-o-Y and Q-o-Q basis. Armour Residential REIT Inc.
(NYSE: ARR) also is an attractive investment option, thanks to its dividend
yield. StockCall has posted free technical research reports on American
Capital and Armour Residential and these can be accessed by signing up at

Armour Residential Ups Dividend

Armour Residential is a mortgage investment REIT and invests in mortgage
backed securities. The REIT is an attractive investment option as it currently
distributes 8 cents per unit every month. It also boasts of healthy margins
and good revenue growth. Its market price declined marginally over the period
of the past 12 months and it currently trades at attractive multiples. Its
Price-to-Book ratio is near 1, in comparison to industry average of 2. Its
dividend yield is also higher than the ones sported by its peers. Armour
Residential technical report can be accessed for free by signing up at 

While the REIT has attractive dividend yield, investors should carry out due
diligence to see the possibility of continued dividend growth. Since the REIT
has good revenue growth rate, it is expected to retain its high dividend rate
in the future as well. Armour Residential REIT holds its major stakes in
Ginnie Mae, Fannie Mae and Freddie Mac. These companies are making a comeback
and with the improvement in their stock prices Armour Residential REIT
directly stands to benefit.

At the very same time, Armour Residential sports high leverage ratio. While it
helps to boost profit margins, it may also increase its risk profile. However,
Armour Residential investors stand to gain as the company recently authorized
a share repurchase program worth $100 million.

American Capital Agency Announces Q4 Results

American Capital Agency Corp. had a good run in 2012. The REIT reported its
fourth quarter EPS at $2.37, about 10 times higher than the EPS reported for
its previous quarter. REITs investing in MBS are now competing with FED and
trying to get the piece of the same pie. However, American Capital Agency is
looking to diversify its holding to include HARP loans and lower loan balance
mortgages, lowering its risk profile. Download the free report on American
Capital upon registration at 

American Capital Agency paid $1.25 per share in dividend for the fourth
quarter of FY 2012. The REIT has a history of solid dividend payment and is
likely to continue on that path. For its fourth quarter, it also reported an
increase in its Return on Equity. It is also working to augment its net
interest spread, which is its mainstay. The task is set to get tougher due to
changed rulings. However, American Capital Agency looks set to achieve its
targets. The REIT is also going ahead with its share repurchase program to
return value to its investors. In the coming future, American Capital Agency
stock is expected to make moderate up move.

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