4 Mortgage REITs with Attractive High Dividend Yields

real estate investment trust (REITs) Some of the best options for investors looking to generate stable dividend income. This is because, according to Securities and Exchange Commission (SEC) rules, listed REITs must distribute at least 90% of their taxable income to their shareholders each year.

The need for high-dividend stocks is growing as the market surges from the recent rally of relief stemming from the tech giant’s poor performance. He’s down 9% year-to-date, even though the Dow Jones Industrial Average (DJIA) index is poised to record his first monthly gain in almost 30 years this October. With market volatility still so high, high-dividend REITs seem like an ideal hedge against current market risk.

Claros Mortgage Trust Inc. (NYSE: CMTGMore)

The Maryland-based REIT pays an annual dividend of $1.48 and earns 9.19% at its current share price. Despite recent headwinds in the housing market, Claros Mortgage’s primary focus on commercial real estate lending has allowed it to maintain its revenue channel.

Claros Mortgage CEO Richard Mack said: Given our strong balance sheet and ample liquidity, we believe we are well positioned to take full advantage of the attractive lending opportunities available in our target markets. ”

Claros Mortgage’s earnings and dividend are expected to remain solid at least through the end of the year as the Federal Reserve remains aggressive and is expected to raise rate hikes by another 0.75% next week.

Annaly Capital Management Inc. (NYSE: NLY)

With $86 billion in total assets, Annaly is a leading REIT in the mortgage finance market. The company pays an annual dividend of $3.52, giving him a 19.08% yield on prevailing prices, higher than the industry average. The four-year average dividend yield is 12.45%.

Rising mortgage rates are putting pressure on housing demand, while home prices are still up 40% since early 2020. To protect against market uncertainty, Annalee has adopted sound hedging strategies and increased its capital allocation to its Mortgage Servicing Rights (MSR) platform. As of Oct. 26, Annaly is her second largest purchaser of her MSR year-to-date.

Annaly’s generally accepted accounting principles (GAAP) earnings per share (EPS) were $1.06 for the third quarter of the fiscal year ended September 30, beating the consensus EPS forecast of $0.99. rice field. Additionally, Annalee’s EPS for the nine months ended September 30 was $6.45, reflecting a year-over-year increase of 20.79%. Barclays analysts recently upgraded Analy’s rating from equal to overweight, according to Bloomberg.

Dynex Capital (NYSE: DX)

Dynex focuses on both agency and non-agency mortgage-backed securities (MBS). Dynex’s sound management, liquid balance sheet, and strong capital base maintain its position as one of the highest dividend-yielding REITs in the market. It currently pays an annual dividend of $1.56, making a respectable profit of 12.95% of its current price. Dynex’s stock price has risen 3.43% for him this past month.

Non-GAAP earnings of $0.24 in the third quarter of 2022 despite lower market values ​​in the investment portfolio due to superior hedging policies. Additionally, gross interest income increased 11.28% sequentially to $20.4 million.

The Fed’s hawkish stance may limit Dynex’s growth opportunities, but the company’s top-down macroeconomic focus and ‘raise credit, raise liquidity’ policy could ease a recession. you should be able to get through it.

Arbor Realty Trust Inc. (NYSE: ABRMore)

Arbor is a multi-billion dollar real estate investment trust headquartered in New York. With over 25 years of experience, Arbor is one of the top 10 by volume Fannie Mae DUS® Multifamily Lenders (as of 2021). He is also the leading multi-family landlord for Freddie Mac.

Arbor’s share price rose 20.26% over the month, beating the Dow Jones Index’s historic 14.4% gain. The stock is up 12.44% in the last five days alone. Analysts expect Arbor’s rally to continue in the short term. The price target for the stock is $17.50, which represents a 26.54% upside potential.

Arbor Realty Trust will pay an annual dividend of $1.56, yielding 11.28% of the current share price. The four-year average dividend yield is 9.55%. Over the past five years, the company’s dividend payout has increased at a compound annual growth rate of 16.8%.

The REIT raised its quarterly cash dividend to $0.39 in July, marking the ninth consecutive quarter of increases, and a 30% increase in dividend payouts over the period. Arbor’s earnings for the soon-to-be-reported third quarter are expected to grow 38.8% year-over-year, which is expected to lead to even more significant dividend increases.

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