StockCall Study on Newcastle Investment and Anworth: mREITs Offer Good Returns
LONDON, February 15, 2013
LONDON, February 15, 2013 /PRNewswire/ --
MBS REITs are facing stiff competition and this time it is from the Fed. The
mortgage interest rate declines have squeezed the margins enjoyed by MBS
REITs. The segment is also getting crowded, posing stiffer competition for
survival. However, the winners in the segment are the REITs with the right
kind of asset mix in their portfolio. QE3 created new challenges for pure play
Agency MBS REITs, to which many are fast adapting. Newcastle Investment Corp.
(NYSE: NCT ) offers good capital growth along with healthy dividend.
However, the company is diversifying itself and boosting its Mortgage
Servicing business. On the other hand, Anworth Mortgage Asset Corporation
(NYSE: ANH ) paid higher dividend despite soft Q4 results. StockCall free
coverage on Newcastle Investment and Anworth is available upon registration at
Anworth Mortgage Asset Corporation Offers High Dividend Yield
Anworth Mortgage Asset Corporation mainly invests in Mortgage backed
Securities, specializing in the securities backed by government agencies like
Freddie Mac and Fannie Mae. The REIT recently reported its fourth quarter
results and its interest income stood at $45.1 million, showing 16 percent
decline. However, its interest expense remained flat and its net interest rate
spread declined. It pays 15 cents per share in quarterly dividend. Register
now and get access to the free analysis on Anworth Mortgage Asset Corporation
Anworth Mortgage Asset Corporation is mainly invested in Agency MBS, which
have been greatly affected by Quantitative Easing. However most of its MBS
belong to fixed rate or hybrid ARM category. It also has fairly good
percentage of non-agency MBS, which cushions the blow. It is also shielded
well against prepayment acceleration.
Anworth Mortgage Asset Corporation delivered 8 percent return on a
Year-to-Date basis and further sweetened it with 9.62 percent dividend yield.
While its 52-week return is rather disappointing, the stock seems to have
bounced back and is likely to retain the flow. Overall, Anworth Mortgage Asset
Corporation provides a good investment opportunity with its well-insulated
portfolio of Agency and Non-Agency REITs.
Newcastle Investment Corp. is up and running, hitting new 52-week high on its
way. The REIT recently partnered with Nationstar Mortgage. The new
collaboration will help the company in enhancing its mortgage servicing
business. The duo aims to buy such rights mainly from Bank of America, which
is currently offloading them. Newcastle Investment Corp. may also spin off its
Mortgage Servicing rights to unlock maximum value. The new outfit has been
branded New Residential.
Newcastle Investment Corp. Spins Off Mortgage Servicing Business
Newcastle Investment Corp. stock is up 30 percent this year and the momentum
is likely to continue as the company makes aggressive moves to boost its
position. Its stock is also getting lapped up by its management as its
Director Wesley Edens and Secretary Randal Nardone purchased 106,950 shares of
the company stock. Insider purchase is generally an encouraging sign for
investors. Its stock price is also expected to grow further in-line with
improved conditions in the general economy and housing sector. Newcastle
Investment Corp. also offers attractive dividend and its yield stands at 7.86
percent, making it an attractive investment option. Download the free
technical research on Newcastle Investment Corp. by signing up at
Newcastle Investment Corp. also has good management as evidenced by the fact
that it bought discounted Mortgage Backed securities and continues to benefit.
Its new spin-off is expected to bring further value to investors.
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